10.75% SREI Equipment Finance NCD – Dec’18/Jan’19 – Should you Invest?
SREI Equipment Finance has come out with public issue of non-convertible debentures (NCD) offering up to 10.75% interest rate. The issue opens on December 19, 2018 and closes on January 18, 2019.
SREI Equipment Finance is joint venture of SREI and BNP Paribas and deals with financing of Infrastructure equipment in organized sector.
SREI Equipment Finance NCD – Significant Points:
Offer Period: December 19, 2018 to January 18, 2019
Annual Interest Rates for Retail Investors: 9.75% to 10.75% depending on tenure
Additional Incentive of 0.25% for existing investors and Senior Citizens (for Series III, Series IV, Series VI, Series VII and/or Series IX)
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: “BWR AA+” (BWR Double A Plus) (Outlook: Stable) and “SMERA AA+/Stable’ (SMERA Double A plus/Stable)”
NCD Size: Rs 150 crore with option to retain over-subscription upto Rs 300 crore
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 SREI Equipment Finance NCD.
Company shall allocate and allot Series IV NCDs wherein the Applicants have not indicated their choice of the relevant NCD Series.
For Series V and/or Series VIII NCDs, for investors with 0.25% additional incentive, the maturity amount at redemption along with the additional yield would be Rs. 1350/- per NCD , and Rs. 1667/- per NCD respectively.
The profits of the company declined as compared to the previous year
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.
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 good 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.
Dilemma Dilemma Dilemma... Which one to invest among these two NCD in this January, 2019, SREI Infra or Shriram Transport Finance, both for option of 10 years, Annually Interest, and which one is relatively more safe? 🤔
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Dilemma Dilemma Dilemma... Which one to invest among these two NCD in this January, 2019, SREI Infra or Shriram Transport Finance, both for option of 10 years, Annually Interest, and which one is relatively more safe? 🤔