IFCI NCD – Jan_Feb 2015 – Should you Invest?
IFCI (Industrial Finance Corporation of India) a Government of India undertaking which caters to the long-term finance needs of the industrial sector has come out with Rs 250 crore (with an option to retain over-subscription up to Rs. 790.81 crore) public issue of non-convertible debentures (NCD) offering up to 9.50% interest rate.
Also Read – Know NCD – Investment Tips, TDS and Taxation
There are 4 options of investment in IFCI Ltd. NCD.
This issue is open to all Indian residents, HUFs and Institutions.
However NRIs cannot apply for this NCD.
You are considered as Retail investor (Category IV), if you invest less than Rs 2 Lakhs in the issue.
If you have Demat account apply through that. It’s the easiest way to apply and also avoids a lot of hassle in terms of KYC and paper work
In case you don’t have Demat Account, you can download the application form from company site or Financial Institutions and submit to collection centers.
Most banks have cut their fixed deposit rates recently and with further rate cuts expected from RBI, the FD rates would go down further. IFCI NCD is from government backed company and the chances of default are very low despite not so great credit rating. My recommendation is to invest some part of your Fixed Income investment in this NCD Issue if you are not in the highest tax bracket.
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 is low and hence you would get lower than market value
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