9.50% SREI Infrastructure Finance NCD – Jan/Feb 2017 – Should you Invest?
SREI Infrastructure Finance has come out with public issue of non-convertible debentures (NCD) offering up to 9.50% interest rate. The issue opens on January 30 and closes on February 23, 2017.
SREI Infra Finance is primarily into financing of infrastructure projects along with advisory.
SREI Infra Finance NCD – Significant Points:
Offer Period: January 30 to February 23, 2017
Annual Interest Rates for Retail Investors: 8.5% to 9.5% depending on tenure
Additional coupon of 0.25% p.a. for Category III investors who are holder of NCDs, shareholders and senior citizens
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”
NCD Size: Rs 200 crore with option to retain oversubscription of Rs 706 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
Infrastructure Financing is risky business as the success depends on timely and successful completion of the project. In India, there are a lot of infrastructure projects struck at various stages for various reasons.
The NPA is 3.54% which is bad
The profits of the company declined in last few years
If you have Demat account apply through that or 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
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 within 2-3 days of opening.
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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.
credit rating is by by an unknown agency BMW not by crisil
Brickwork Ratings is SEBI registered Credit Rating Agency and hence the rating is valid. There are other rating agencies like CRISIL, ICRA, CARE, ONICRA, FITCH & SMERA. CRISIL is the largest credit rating agency in India, with a market share of greater than 60%.
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credit rating is by by an unknown agency BMW not by crisil
Brickwork Ratings is SEBI registered Credit Rating Agency and hence the rating is valid. There are other rating agencies like CRISIL, ICRA, CARE, ONICRA, FITCH & SMERA. CRISIL is the largest credit rating agency in India, with a market share of greater than 60%.
hi Amit,
is the interest earned out of this is tax free ?
No its taxed at income tax slab applicable to you