9.4% Reliance Home Finance NCD – Dec 2016 – Should you Invest?
Reliance Home Finance has come out with public issue of non-convertible debentures (NCD) offering up to 9.40% interest rate. The issue opens on December 22 and closes on January 7, 2017.
Reliance Home Finance is primarily into financing of home loans along with Wealth Management, Commercial Finance, etc.
Reliance Home Finance NCD – Significant Points:
Offer Period: December 22 to January 7, 2017
Annual Interest Rates for Retail Investors: 8.9% to 9.4% 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:
Secured – CARE AA+;Stable by CARE; BWR AA+ by Brickwork
Un-secured – CARE AA; by CARE; BWR AA by Brickwork
NCD Size: Rs 1000 crore with option to retain oversubscription upto Rs 3000 crore
Allotment: First Come First Serve
Listing: Bonds would be listed on BSE and NSE and will entail capital gains tax on exit through secondary market
Though the NCDs are listed on exchange but selling them at the right price is difficult due to lack of liquidity. So invest only if you want to hold till maturity.
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 (only first 3 options which are secured)
Avoid the 4th option which is unsecured and has a lower credit orating of “AA” only
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
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.
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.