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.
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:
- Reliance Capital Builder Fund Series -B.
- Sundaram Select Micro Cap Fund Series – V.
- UTI Focused Equity Fund.
- ICICI – Prudential Value Fund Series – 5.
Muthoot Finance – Non – Deposit taking Non-Banking Finance company,Leading Gold Loan company – have come up with issue of Non -Convertible Debentures – NCDs.
Muthoot Finance will raise aggregate 400 Crore through this issue.
NCDs will be listed on BSE and can offer liquidity to investors.
- Issue Open Date: August 18, 2014.
- Issue Close Date: Sept18, 2014.
This issue will offer different options for investors – Monthly Interest,Annual Interest and Cumulative.
Monthly Interest Option – Individual Retail Investors:
If Investor invest Rs.1Lakh then approximate monthly interest [with 11% - 60 months ] will be Rs.916...it will slightly differ every month as it will be based on number of days.In case of physical mode if annual interest exceeds 5000 then tax may be deducted at source. Investors who are eligible can submit form 15G or 15H to avoid tax deduction at source.OR contact registrar of issue for more detaills.
Annual Interest Payment Option:
One can view that money can get doubled with last option 78Months
NCDs in cumulative mode are compulsorily in Demat mode so if you want to invest in cumulative option you need to have a demat account.
NCDs are secured Excluding 78-Month Cumulative option – IDBI Debenture Trustees are debenture trustees of this issue.
Credit Rating : AA-by ICRA – indicates Higher safety and stable issue.
Company Networth :
Company have reported a good growth in Networth in last 05 yrs.
Muthoot Finance – Operating Profits:In Crores
Muthoot Profit Net Profit in Crores- After Tax and Depreciation:
One can find some deep in Net profits –probably because of RBI restrictions on loan disbursements.
Muthoot Finance is well established company with cumulative growth in net profits more than 25% in last 05 years..Still investors should have awareness about external factors like Gold prices,Regulations etc which affect company’s performance.Issue offers better interest rates and one can think to invest small part of fixed income portfolio in this issue.