NBFCs roll out non-convertible debentures with up to 12.25 per cent pre-tax return
Several non-banking financial companies have come out with
non-convertible debentures (NCDs) offering up to 12.25 per cent pre-tax
return.
If you are worried about the recent drop in bank fixed deposit rates, here is some good news. Several non-banking financial companies have come out with non-convertible debentures (NCDs) offering up to 12.25 per cent pre-tax return.
Among the NCDs that are still open for subscription are those from Muthoot Finance, Religare Finvest and Shriram City Union.
Muthoot Finance NCD is offering 12.25 per cent interest for a maturity period of six years. The interest would be paid only at the end of the tenure (cumulative option).
It also has monthly and annual interest payment options . For the five-year NCD, the company is offering 12 per cent under the annual interest payment option and 11.75 per cent in the monthly payment option. For two and three years, the rate of interest is 11.75 per cent payable annually. The NCDs, which opened for sale on 17 September, will be available for subscription till 5 October, 2012.
Religare Finvest is offering up to 12.5 per cent on its NCDs for retail investments of less than Rs 5 lakh for a five-year tenure under the cumulative interest payment option. It is offering to double investors' money in 70 month. The issue closes on 27 September.
Shriram City Union is offering 11.5 per cent on threeyear NCDs and 11.75 per cent on five-year NCDs across all options. The issue closes on 26 September.
The minimum application amount for all the three issues is Rs 10,000. All NCD offers have been rated AAby rating agency ICRA. An instrument with AA rating is considered to have very low credit risk. NCDs are exchange-traded secured debt instruments. Interest earned from NCDs is taxed as per the investor's income tax slab.
Proceeds from sale of NCDs before maturity is considered capital gains and taxed accordingly. Short-term capital gains are added in the taxable income of the investor. Long-term capital gains are taxed at 10 per cent without indexation (adjustment for inflation) and 20 per cent with indexation.
Among the NCDs that are still open for subscription are those from Muthoot Finance, Religare Finvest and Shriram City Union.
Muthoot Finance NCD is offering 12.25 per cent interest for a maturity period of six years. The interest would be paid only at the end of the tenure (cumulative option).
It also has monthly and annual interest payment options . For the five-year NCD, the company is offering 12 per cent under the annual interest payment option and 11.75 per cent in the monthly payment option. For two and three years, the rate of interest is 11.75 per cent payable annually. The NCDs, which opened for sale on 17 September, will be available for subscription till 5 October, 2012.
Shriram City Union is offering 11.5 per cent on threeyear NCDs and 11.75 per cent on five-year NCDs across all options. The issue closes on 26 September.
The minimum application amount for all the three issues is Rs 10,000. All NCD offers have been rated AAby rating agency ICRA. An instrument with AA rating is considered to have very low credit risk. NCDs are exchange-traded secured debt instruments. Interest earned from NCDs is taxed as per the investor's income tax slab.
Proceeds from sale of NCDs before maturity is considered capital gains and taxed accordingly. Short-term capital gains are added in the taxable income of the investor. Long-term capital gains are taxed at 10 per cent without indexation (adjustment for inflation) and 20 per cent with indexation.
