Prime NCD Recommendation: A bond with 9%-plus yield
A non-deposit taking NBFC, registered with RBI, has come up with a public offering of secured non-convertible debentures
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8 thoughts on “Prime NCD Recommendation: A bond with 9%-plus yield”
how to buy it? can u eloborate step by step, for eg on zerodha ?
Hello Sir, You will need to check with your broker as you simply need a demat and broker account and apply. We are not into operations/transaction execution and will be unable to explain. thanks, Vidya
Thanks for the article, would it be possible to give the efective yield after considering the tax outgo at different slabs. Though it can be derived by investor, it gives a more appropriate picture while considering the yield than the coupon rate.
thanks
Saravanan
To make yields comparable with other option, pre-tax is usually given. You can simply deduct your effective rate to figure what it is post tax. thanks, Vidya
How does one apply?
All major brokerage platforms will offer.
1. Is there a relationship between the effective yield and the interest payment frequency?
Can we say that, more often the interest is paid out, lower the effective yield (as the paid out interest may not be invested back at the same rate)?
2. Why prefer the annual payout over cumulative? Is it because of concerns about safety of the capital?
The company has tweaked coupons to ensure cumulative is slightly less attractive than payout. We have mentioned this in the report
“Please note that since the yields on cumulative options are not attractive, we are not recommending them. Also, considering the high risk, payout is a more prudent option.”
Also, yes safety of capital is a concern for NCDs below AA.
Vidya
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