IIFL Home Bond Review

IIFL Home Bond

IIFL one of the largest financial service company in India plans to open IIFL home bonds NCD on Dec 12, 2013.  The NCD issue is 250 Cr with option to retain over subscription of additional 250 Cr aggregating to a total up to 500 cr. Let’s checkout features of IILF Home Bond.

IIFL Home Bond details-

  • Face value of NCD – 1000 Rs/-
  • Minimum application size is 10,000 Rs/-; Allotment on a first-come-first-served basis;
  • 12.15% p.a. yield; 11.52 coupon with monthly income
  • Bonds are secured and carry maturity 5 years
  • No TDS on interest if held in DEMAT Form
  • Bonds will be listed on NSE and BSE
  • Minor through guardian can apply
  • Rated AA- by CARE and CRISIL
  • Monthly interest payment option to enable regular cash flows to investors
  • No Call & Put Option available, which means company Cannot prematurely redeem the bonds
  • Offer opens on December 12, 2013 and closes on December 20, 2013
  • Allotment will be done on first come first serve basis

This is the fourth issue from IIFL Group in the last 3 years.

Looking at first glance with 12.15% yield & 11.52% coupon is very lucrative offer but we should look at return on a post-tax basis.

For someone in highest tax bracket 30% this coupon rate of 11.52% will reduce to 8.12% post tax. For tax bracket of 20% it will reduce to 9.6% post tax and to 10.36% for 10% tax bracket.

Post tax return is slightly higher compare to FD. We recommend you to invest in this NCD only if you are falling under lower tax bracket (10% slab) and happy with return of 10.36%.

If you enjoy reading this post, do share with your friends on facebook and twitter!

Article by Raviraj

Hi, I am Raviraj. I am passionate about money matters and finance. I have 12 years of rich experience in the field of financial planning, Investments & Insurance. I have written 1000+ article on this blog. If you like my efforts kindly subscribe to this blog and also let your friends know about this website by sharing.

Subscribe to Blog

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Leave a Reply

Your email address will not be published. Required fields are marked *