9.55% SREI Equipment Finance NCD – July’17 – Should you Invest?
SREI Equipment Finance has come out with public issue of non-convertible debentures (NCD) offering up to 9.55% interest rate. The issue opens on July 17 and closes on July 31, 2017.
SREI Equipment Finance is joint venture of SERI and BNP Paribas and deals with financing of Infrastructure equipment in organized sector.
SREI Equipment Finance NCD – Significant Points:
Offer Period: July 17 to 31, 2017
Annual Interest Rates for Retail Investors: 9.25% to 9.55% depending on tenure
Additional 0.15% interest (retail investors only – Category III) for SERI previous NCD holders (original allotted only), shareholders of SERI or senior citizens or Existing Employees of SREI Infra on the Deemed Date of Allotment
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+” (Outlook Stable) by “BRICKWORK” & “AA+/Stable” by SMERA Ratings Limited
NCD Size: Rs 500 crore with option to retain over-subscription upto Rs 1000 crore
Allotment: First Come First Serve
Listing: Bonds would be listed on BSE & NSE and will entail capital gains tax on exit through secondary market
The profits of the company declined as compared to the previous year
The NCD is unsecured.
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.
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
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
Remember the NCD is Unsecured which means it’s not backed by any company asset and in case company shuts down you would be last in queue of lenders to receive money
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.