9.25% DHFL NCD (Tranche II) – Aug/Sep 16 – Should you Invest?
DHFL (Deewan Housing Finance Ltd) is Third Largest Home Loan & Housing Finance Company in India. The company has come out with its second tranche of non-convertible debentures (NCD) offering up to 9.25% interest rate. The issue would open on August 29 and would close on September 12, 2016.
DHFL NCD – Significant Points:
Offer Period: August 29 to September 12, 2016
Annual Interest Rates for Retail Investors: 9.10% to 9.25% depending on tenure
Price of each bond: Rs 1,000
Minimum Investment: 10 Bonds (Rs 10,000)
Max Investment Limit for Retail Investor: Rs 10 Lakhs
Credit Rating: “CARE AAA” by CARE & “BWR AAA” by Brickwork
NCD Size: Rs 2,000 crore with option to retain oversubscription of Rs 10,000 crore
Allotment: First Come First Serve
Listing: Bonds would be listed on BSE & NSE and will entail capital gains tax on exit through secondary market
The company is doing well in last few years with consistent profits.
This is secured NCD
Why you should not invest?
In case the property market remains subdued for longer time, the home loan business can suffer. This might lead to rise in NPAs and lower the rating of DHFL.
Early exit might not give you the right privce as the liquidity on exchanges for NCDs are low. So invest only if you can hold till maturity.
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How to Apply?
If you have Demat account apply through ASBA facility provided by banks. It’s the easiest way to apply and also avoids a lot of hassle in terms of KYC and paper work.
DHFL NCD is AAA rated with attractive interest rate, so the recommendation is to invest good part of your Fixed Income investment in this NCD Issue
You should always have diversified portfolio be it fixed deposit, NCD or equity investment
Its good idea to remain invested till maturity because liquidity on exchanges are low and hence you would get lower than market value
If you plan to invest in this issue, do it on the first day itself as most NCD issues are over-subscribed before the end date.
DHFL NCD Advertisement:
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Amit
Hi Readers! I am Amit, the mind behind Apnaplan.com
I am MBA from NITIE, Mumbai and BIT from Delhi University.
This blog is my online diary where I write about my tryst with my investment decisions. In the 400+ posts on this blog you will find articles on Personal Financial Planning, Investments, Retirement Planning, Insurance, Loans, Fixed Deposits, Provident Funds, Stock Markets, Gold, Silver, Real Estate Investment, Credit Cards, Credit Score, Taxation, Inheritance Planning and Reviews on various Financial Products.