HomeInvestmentShriram Transport NCD@11.75% - Review

Shriram Transport NCD@11.75% – Review

Shree Ram Transport NCD

Shriram Transport Finance company – STFC one of the largest NBFC is coming up with NCD issue in 7th Oct 2013.Company is looking to raise Rs. 500 crore through this NCD issue.

We are herewith details of Shriram Transport Finance Company NCD – Oct 2013.

Interest Rates:

Series & Tenure

Intrest Rates

Intrest Payment Frequency
    Individual/HUF Others  
I 36 Months

11.25%

10.75%

Annual
II 60 Months

11.50%

10.75%

Annual
III 84 Months

11.75%

10.75%

Annual
IV 36 Months

11.25%

10.75%

Cumulative
V 60 Months

11.50%

10.75%

Cumulative
VI 84 Months

11.75%

10.75%

Cumulative

Here Individual and HUF has chance to fetch higher rate of interest 0.5%-1% based on duration.

Series I,II and III offers annual interest payment while Series IV,V and VI are on cumulative interest.

Tax is applicable on maturity amount and TDS will be deducted.

Highest interest rate 11.75% is for period of 84 months (7 Years).

The NCD issue is aggregating upto Rs 250 crore with an option to retain over-subscription of Rs 250 crore.

Face value per bond is Rs. 1000/-.

Credit Rating: CARE AA+ and CRISIL AA.

Important Dates:

  1. Issue Open Date:07/10/2013.
  2. Issue Close Date:21/10/2013.

Who can invest?

Four categories of investors can apply. Category 1 – institutional investors; category 2 – non institutions investors; category 3- HNIs, HUF via Karta (aggregate investment of more than Rs 5 lakh across series); and category 4- retail investors with aggregate investments across series less than Rs 5 lakh.

What should you do?

 This NCD is secured means less risky but not totally risk free. Investor in lower tax bracket can earn higher return more than 10 percent post tax, which is higher than fixed deposit.

This is a good investment opportunity for those in the lowest tax bracket. Higher tax bracket individual may opt for tax free bonds.

Shitanshu Kapadia
Shitanshu Kapadiahttp://moneyexcel.com/
Hi, I am Shitanshu Kapadia founder of moneyexcel.com. I have written 1800+ articles on this blog. I am PGDBA(marketing), engaged in blogging for 10 years. Moneyexcel blog is ranked as one of the Top 10 Personal Finance Blog in India. The purpose of this blog is to spread financial awareness and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.
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