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Shriram Transport Finance NCD 2011

23 Jun

The liquidity in the market is decreasing quarter after quarter. Hence, companies are coming up with bonds and non-convertible debentures(NCD) to raise money. After applying for SBI bonds and PFC Infrastructure bonds, I am again contemplating investing in this. Here I present more details as per my research:

  1. Two options to begin with : Option 1 –> 3 years & Option 2 –> 5 years
  2. For Option 1 : Investment below 5 lakhs, Interest = 11.35%
  3. For Option 2 : Investment below 5 lakhs, Interest = 11.60%
  4. For Option 1 : Investment above 5 lakhs, Interest = 11.10%
  5. e. For Option 2 : Investment above 5 lakhs, Interest = 11.30%

Some important things to note:

a. If the NCD is in demat form then no TDS is deducted, else TDS will be deducted at the time of encashing/redemption

b. Each NCD is valued at Rs.1000/-

c. Minimum invetsment amount is Rs.10000/- (10 NCDs will be issued)

d. Put and call options available. And NCDs can be traded using demat and trading account

e. NRI’s cannot apply

Considering the above, and the good interest rate in the offering, an amount of Rs.25000/- and above would be a good investment option. And this can be a route preferred over traditional FDs.

Issue opens on 27th June and closes on 9th July. Since its first-come-first-serve basis, better earlier than later. If interest rates fall further, the value of the NCD will rise further.

Update-1: Indiabulls has the option of applying for this NCD online. Maybe other demat/trading accounts also have this facility. Plz check once before running after the paper based form.

Update-2: TODAY IS THE LAST DAY TO APPLY. DUE TO OVERSUBSCRIPTION, LAST DATE HAS BEEN PREPONED TO 29-June.

Update-3: My amount was refunded although I had applied on the first day. I guess retail investors were not given much consideration.

This post was also published on Yahoo Network

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