On 27 June, Shriram Transport Finance Co. Ltd will open the public issue of its non-convertible debentures (NCDs). The issue will remain open till 9 July. Allotment will be done on a first-come, first-served basis.
The bond is suitably priced for retail investors with face value of Rs 1,000 and minimum investment of Rs 10,000. The interest rate is in the range of 11-11.6%, depending on the tenor and type of investor. Interest is payable annually and will be taxed at your marginal tax rate.
You can invest for five years or three years. The five-year bond comes with a put and call option at the end of 48 months — you can exit early; the company, too, can call for early redemption.
Crisil Ltd has given AA/stable for investments up to R1,000 crore; it has got an AA+ from CARE Ltd.
Also, financial data we looked into suggests the company is comfortably placed to meet its debt obligations. Our take
The bond will offer a higher interest rate than most bank fixed deposits (FDs) and company FDs. Hold till maturity to maximise returns.