9.35% L&T Finance NCD – Mar’19 – Should you Invest?
L&T Finance Limited is one of the leading private non-banking financial services companies in India and part of the larger conglomerate L&T Group has come out with public issue of non-convertible debentures (NCD) offering up to 9.35% interest rate. The issue would open on March 6, 2019. Its primary financing business segments are rural, wholesale and housing.
L&T Finance NCD – Significant Points:
Offer Period: March 6 to 20, 2019
Annual Interest Rates for Retail Investors: 9.10% to 9.35% 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: ‘AAA (Stable)’ by ICRA and ‘AAA/Stable’ by CARE
NCD Size: Rs. 500 Crores with an option to Retain Over-subscription Up to Rs 1500 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
There are NCDs available in secondary market which have higher yields with similar rating. The problem is low liquidity and hence is difficult to buy in large numbers.
The present Tax Free Bonds are offering yields up to 6.5% in secondary market, which is better investment for People in highest tax bracket.
How to Apply?
You can apply online by 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.
In case you don’t want to do it online, you can download the application form from company site or Financial Institutions and submit to collection centers.
Recommendation:
My recommendation is to invest some 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 early as most NCD issues are over-subscribed before the end date.
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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.
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I am a novice in this area. But, could you please tell me what do you mean by "secondary market"?
Where can one access the secondary market? Is there any websites?
Secondary market is stock exchange (where you can buy through demat account) while primary market is when you buy directly through the issuing company.
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I am a novice in this area. But, could you please tell me what do you mean by "secondary market"?
Where can one access the secondary market? Is there any websites?
Secondary market is stock exchange (where you can buy through demat account) while primary market is when you buy directly through the issuing company.