8.85% Tata Capital Financial Services Ltd NCD – August 2019 – Should you Invest?
Tata Capital Financial Services Ltd. has come out with public issue of non-convertible debentures (NCD) offering up to 8.85% interest rate. The issue opens on August 13 and closes on August 23, 2019.
Tata Capital Financial Services Ltd is a financial and investment service provider in India. It is based in Mumbai and has more than 100 branches across the country. The company offers consumer loans, wealth management, commercial finance, and infrastructure finance, among others.
Tata Capital Financial Services NCD – Significant Points:
Offer Period: August 13 to 23, 2019
Annual Interest Rates for Retail Investors: 8.45% to 8.85% 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: “CRISIL AAA Stable” by CRISIL Limited and “CARE AAA Stable” by CARE Ratings Limited
NCD Size: Issue size is Rs 4,126 crore (Secured NCDs up to Rs. 2,998 crore & Unsecured NCDs up to Rs. 1,128 crore)
NRIs are NOT eligible to apply to this NCD issue.
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
There have been issues with some well rated companies like DHFL, IL&FS where rating agencies suddenly downgrade the rating. This risk always existed but it has come to forefront in last few months
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.
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 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 on first day as most NCD issues are over-subscribed within few 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.