9% Piramal Capital & Housing Finance Ltd NCD ★ July’21 ★ Should you Invest?

Piramal Capital & Housing Finance, has come out with Piramal Capital & Housing Finance Ltd NCD (Tranche 1) offering 9% and opens for subscription from July 12, 2021.

Piramal Capital & Housing Finance, incorporated in 2017 is a non­ deposit taking hous­ing finance company and 100% subsidiary of the Piramal Enterprises. The company deals in both wholesale and retail loans. Wholesale funding covers mainly real estate developers, corporates, and SMEs across sectors while Retail loans deals with housing finance, LAP, secured business loans, purchase finance, and personal loans. Additionally, last month National Company Law Tribunal has approved the merger of DHFL with PCHF. piramal capital & housing finance ltd ncd

Piramal Capital & Housing Finance Ltd NCD – Significant Points

  • Offer Period: July 12 to 23, 2021
  • Annual Interest Rates for Retail Investors: up to 9% 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 AA, ICRA AA with Outlook Negative
  • NCD Size: Base issue size of ₹200 crore, with an option to retain oversubscription up to ₹800 crore aggregating up to ₹1,000 crores
  • Date of Allocation: August 11, 2021
  • Allotment: First Come First Serve
  • Listing: Bonds would be listed on BSE & NSE and will entail capital gains tax on exit through secondary market

Learn All about NCDs

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.

Piramal Capital & Housing Finance Limited Bonds – Investment Options

There are 5 options of investment in PCHF NCD.

Piramal Capital & Housing Finance Ltd NCD - Investment Options - July 2021
Piramal Capital & Housing Finance Ltd NCD – Investment Options – July 2021

Best way to Double your Money

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.

Piramal Capital & Housing Finance NCD – Who can Apply?

This issue is open to all Indian residents, HUFs and Institutions.

  1. Category I – Institutional Investors – 10% of the issue is reserved
  2. Category II – Non-Institutional Investors, Corporates – 10% of the issue is reserved
  3. Category III – HNIs – 40% of the issue is reserved
  4. Category IV – Retail Individual Investors – 40% of the issue is reserved

However NRIs cannot apply for this NCD.

PCHF NCD Review

Why you should invest in Piramal Capital & Housing Finance NCD?

  1. AA Credit rating means low likely hood of credit default
  2. The interest rates are 3% – 4% higher than your regular Bank FDs
  3. No TDS as it would be only issued in Demat Form
  4. Increase profits and loan portfolio year over year

Why you should not invest in Piramal Capital & Housing Finance NCD?

  1. There have been issues with some well rated companies like DHFL, IL&FS where rating agencies suddenly downgrade the rating. This risk always existed but it has come to forefront in last few months
  2. PHFL hase merged with DHFL – which may lead to the worsening on the loan Portfolio leading to increased NPA going forward.

Should you Invest in Gold?

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?

Piramal Capital & Housing Finance Limited Bonds - July 2021
Piramal Capital & Housing Finance Limited Bonds – July 2021

How to Apply for Piramal Capital & Housing Finance NCD?

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.

How to apply for NCD through ASBA?

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.

Recommendation:

  1. My recommendation is to invest some part of your Fixed Income investment in Piramal Capital & Housing Finance NCD Issue
  2. You should always have diversified portfolio be it fixed deposit, NCD or equity investment
  3. Its good idea to remain invested till maturity because liquidity on exchanges are low and hence you would get lower than market value

How much Taxes you Need to Pay this Year? Download Our Income Tax Calculator to Know your Numbers

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.

Piramal Capital & Housing Finance NCD FAQs

✅ How to apply for Piramal Capital & Housing Finance NCD?

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.

✅ Is Piramal Capital & Housing Finance NCD Secure?

Piramal Capital & Housing Finance NCD is secured.

✅ What is tax on Piramal Capital & Housing Finance NCD?

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)

✅ Is Piramal Capital & Housing Finance NCD safe to invest?

The credit rating for Piramal Capital & Housing Finance NCD is AA. This is investment grade and less likely to default on principal or interest payment. 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.

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