10.75% SREI Infrastructure Finance Limited NCD – Apr’19 – Should you Invest?
Incorporated in 1985, Kolkata-based SIFL is a listed company and is in the business of financing infrastructure projects and equipment. It has come out with public issue of non-convertible debentures (NCD) offering up to 10.75% interest rate.
Annual Interest Rates for Retail Investors: 9.75% to 10.75% depending on tenure
Additional interest of 0.25% for Senior citizens, existing investors and existing employees of the SREI group on the 3 & 5 Year non-cumulative NCDs (Option III, IV, VI & VII)
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 Brickworks
NCD Size: Rs. 100 Crores with an option to Retain Over-subscription Up to Rs 500 crore
Allotment: First Come First Serve
Listing: Bonds would be listed on BSE and will entail capital gains tax on exit through secondary market
High degree of Debt as compared to tangible assets, which means in rare event of liquidation company may not be able to service all debts.
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.
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.
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
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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.