9% Mahindra Financial Services NCD – May’16 – Should you Invest?
Mahindra & Mahindra Financial Services Ltd, a leading rural non-banking financial company has come out with public issue of non-convertible debentures (NCD) offering up to 9% interest rate. The issue would open on May 25 and would close on June 10, 2016.
M&M Finance NCD – Significant Points:
Offer Period: May 25 to June 10, 2016
Annual Interest Rates for Retail Investors: 8.44% to 9.00% 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: ‘IND AAA’ India Ratings and Research and ‘CARE AAA’ by CARE
Allotment: First Come First Serve
Listing: Bonds would be listed on BSE and will entail capital gains tax on exit through secondary market
There are 9 options of investment in Mahindra Finance NCD. The interest rates below are only for Retail/HNI investors (Category 3 & 4) as referred below.
The Company would allot Series VI to all valid applications, wherein the Applicants have not indicated their choice of the relevant series of NCDs.
M&M Finance NCD – Who can Apply?
This issue is open to all Indian residents, HUFs and Institutions.
Category I – QIB Portion – 20% of the issue is reserved
Category II – Corporate Portion – 20% of the issue is reserved
Category III – High Net Worth Individual Portion (More than Rs 5 Lakh investment) – 30% of the issue is reserved
Category IV – Retail Individual Investor Portion – 30% of the issue is reserved
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 7.0% in secondary market, which is better investment for People in highest tax bracket.
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.
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.
No related posts.
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.
How I can invest in pl guide me I have DMAT account
Hi - I am an NRI, just wanted to check if I should invest in NRE FDs instead of these bonds as NRE FD in banks like RBL are paying 8.75% and is tax free due to NRE account.
You should go for Bank NRE fixed deposits. Also in most cases NRIs are not eligible to invest including this issue of M&M Financial NCD.
View Comments
How I can invest in pl guide me I have DMAT account
Hi - I am an NRI, just wanted to check if I should invest in NRE FDs instead of these bonds as NRE FD in banks like RBL are paying 8.75% and is tax free due to NRE account.
You should go for Bank NRE fixed deposits. Also in most cases NRIs are not eligible to invest including this issue of M&M Financial NCD.