Muthoot Fincorp Ltd, has come out with public issue of non-convertible debentures (NCD) – Muthoot Fincorp NCD offering up to 10.20% interest rate and opens for subscription from April 7, 2021. This post is about Muthoot Fincorp NCD Review.
Muthoot Fincorp Ltd is a non-deposit taking NBFC (non-banking finance company). The NBFC is focused on loan against gold ornaments & jewellery for personal & business needs. They also have some interest in generation and sale of wind energy and real-estate. Note: Muthoot Fincorp Ltd is a different company than Muthoot Finance which is market leader in gold loans.
NCDs or non-convertible debentures or more popularly known as Bonds are a bit complex investment products. You must understand the product, risk involved, the taxation on interest received and when you sale it. We have done a separate post regarding this titled – Know all about NCDs.
Also you can keep track of upcoming NCD issues here.
There are 9 options of investment in Muthoot Fincorp NCD.
Who does not want more and wouldn’t you love to Double your money? For sure we all would – we have listed 7 authentic investments which you can use to double your money. The post talks not only about the returns but also the risks associated with each investment.
This issue is open to all Indian residents, HUFs and Institutions.
However NRIs cannot apply for this NCD.
We looked at more than 55 years history of gold to see if its a good idea to invest in Gold. We concluded that its more volatile than perceived but investing in long term may provide you with more stable returns. You can look at the complete analysis and our conclusion here – Looking at Gold Price History in India – Should you Invest in Gold?
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.
If you want to apply to NCDs, ASBA is the best way to do so. It’s easy, secure and the money leaves the account only when the bonds are allocated. We have covered step by step process for ASBA in SBI in the post. You have ASBA facility in most big banks.
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.
Do you know how much tax you need to pay for the year? Have you taken benefit of all tax saving rules and investments? Should you use the “NEW” tax regime or continue with the old one? In case you have all these questions just Download the Free Excel Income Tax Calculator for FY 2021-22 (AY 2022-23) and get your answers.
You can apply online by ASBA facility provided by most 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.
Muthoot Fincorp NCD Series IV, V IX is unsecured while all other investment options is secured by its assets and future income.
For Tax Purpose NCDs are treated similar to Fixed Deposits. The interest earned is added to your income as “income from other sources” and taxed accordingly.
In case the NCD is sold before maturity on stock exchanges, it would lead to Capital Gains and taxed according to the holding period.
-If the NCD was sold within 12 months of allotment, it leads to Short Term Capital Gains and
-if the selling period is more than 12 months its Long Term Capital Gains
-Short Term Capital Gains would be added to income and taxed accordingly
-Long term capital Gains would be taxed at the flat rate of 10% (u/s 112 of IT Act)
The credit rating for Muthoot Fincorp NCD is A+. This is high risk for retail investors. If you must invest choose only secured & short term options (Series I, II, VI, VIII). Do remember that these ratings are as of today and these may change depending on company’s performance and external situations. So investors need to track the company closely.
Muthoot Fincorp NCD would be listed on BSE within 6 days of close of the issue.
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Dear Team ,
I amSaji John , would like to know more about the Fixed Deposit.
I am from Venomny , Alappuzha Dist , Kerala .
pls reply through mail.
Awaiting your reply.
Regards.
In HDFC Bank ASBA facility, this issue is not listed. How to apply then?