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11.75% SREI NCD Issue Sept 2014:


SREI Infrastructure Finance company – NCD Issue – Sept 2014:

SREI – Infrastructure Finance company -IFC Status – manages assets of more than 30,000 crore have come up with an NCD issue.

This issue will open on Sept 29 and will close on Oct 31, 2014.

Issue offers max interest of 11.75% for period of 60 months.

Security : Security cover will be provided by company through debenture trustees.

Interest Rate Structure:

coupon rate structure for Retail,Individual investors is as follows:

 

Series Tenure Coupon
Rate for Retail Investors % per annum
Interest
Payment frequency
I 2
YRS
11.25 Annual
II 2
YRS
11.25 Cumulative
III 2
YRS
11.50 Monthly
IV 3
YRS
11.50 Annual
V 3
YRS
11.51 Cumulative
VI 3
YRS
11.75 Monthly
VII 5
YRS
11.75 Annual
VIII 5
YRS
11.75 Cumulative

 

Credit Rating:

AA- by CARE and AA by Brickwork.Both indicates stable issue.

0.25% Extra for Existing NCD investors/Equity Shareholders /Sr.citizen:

Additional coupon of 0.25% p.a. for existing bondholders and/or equity shareholders of the company and/or senior citizens for Individual Category of investors on Deemed Date of Allotment.

So overall AA – issue offering 11.75% rate can be a good bet.But investors need to aware about credit risks and then invest small amount from fixed income portfolio.

Updated Interest Rates Of Mahindra Financial Services,DHFL,Shriram Transport Deposits:

Following downward trend in Deposit rates few top most Non-Banking Finance Company have revised their deposit rates.

Mahindra & Mahindra Financial Services – part of M&M Group :Company have major penetration in Rural areas and have diversified client base from Retail to SMEs.Most of the analysts believes that this company have transition potential from mid cap to large cap.Mahindra Finance is currently offering max deposit rate of 10% for 36 months.Rest DHFL – Third largest Home loan providers with asset under management more than 46,000 Crores as on June 2014. STFC – Largest commercial Vehicle finance company-also reputed company.

Click Here To View Details of Mahindra Finance Deposit Rates.

Click Here To View Details of DHFL Deposit Rates.

Click Here To View Details of Shriram Transport – STFC Deposit Rates.

Positives Of Closed Ended NFOs:

As market is in uptrend,there are raining New Fund Offers – especially closed ended with period ranging from 03 to 05 years.At maturity investors have options like automatic withdrawal as per prevailing NAV or switch it to other fund of same AMC. Though prior experience of 2008 is not good,most of the AMCs believe that there will be different story as both fundamental and technical attributes are different this time.

Its true that such NFOs have its own Pros and Cons.Here we have listed few positives of Closed ended NFOs.

Portfolio Of Low liquid But Fundamentally Strong Companies:

In open ended fund,its difficult for any fund manager to allocate significant part in Illiquid stocks.If there is significant redemption amount to obey and manager sold out even some part of holding then one can see significant drop in stock price.For closed ended scheme fund manager will not have any such pressure and its possible for fund manager to allocate significant part in not much known but fundamentally strong companies.

Strategic Allocation :

There are different opportunities at different times and different levels.Complete portfolio makeover is difficult for any open ended fund.Based on todays parameters and opportunities manager can allocate funds strategically in closed ended funds.

Focused & Compact Portfolio:

Most of the funds have 25-40 stocks in portfolio and can be considered as compact or focused portfolio…allocated with defined time constrains. rather buying  stock from market its fair to invest in NFO.

Being new funds these fund will not have any track records but most of the times managers are enough experienced.One can think to invest if he /she is really convinced with growth story for next 3-5 years  and have target period at least equivalent to period of scheme.

Risk Factor: we have highlighted few positives of closed ended NFOs but one should note —–Though there is positive sentiment ..there is shift of Risk Levels after recent rallies.Don’t invest merely based on performance based on last one year.

Currently Open NFOs:

  1. Reliance Capital Builder Fund Series -B.
  2. Sundaram Select Micro Cap Fund Series – V.
  3. UTI Focused Equity Fund.
  4. ICICI – Prudential Value Fund Series – 5.

 


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