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7.50% MAHILA SAMMAN BACHAT PATRA / SAVINGS CERTIFICATE

Finance Minister Nirmala Sitharaman in her Budget 2023 speech has proposed to
introduce a new post office small savings scheme, called Mahila Samman Bachat
Patra / Savings Certificate, carrying 7.50% fixed interest rate. There will be a
cap of investment amount up to Rs. 2 lakh and the scheme will be available for 2
years till March 2025. As indicated by the name of the scheme, it will be
available for investment by women and girls only.

We’ll update this post as more details are still awaited post budget 2023
announcement in the parliament.

No related posts.

Author Shiv KukrejaPosted on February 1, 2023February 1, 2023Categories
Articles, Fixed Deposits, InvestmentsLeave a comment on 7.50% Mahila Samman
Bachat Patra / Savings Certificate
Featured


IIFL FINANCE LIMITED 9% NCDS – JANUARY 2023 ISSUE

This post is written by Shiv Kukreja, who is a Certified Financial Planner and
runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at
shivskukreja@gmail.com

IIFL Finance will be launching its public issue of non-convertible debentures
(NCDs) from January 6, 2023. The company wants to raise Rs. 1,000 crore from
this issue, with base issue size of Rs. 100 crore and an additional green-shoe
option of Rs. 900 crore. The issue is scheduled to close on February 18.



The company is offering interest rate in the range of 8.50% for 24 months and 9%
for 60 months. The issue is rated “CRISIL AA/Stable” by CRISIL Limited and
“[ICRA] AA (stable)” by ICRA Limited.

Here are some of the salient features of the issue:

Size & Objective of the Issue – Base size of the issue is Rs. 100 crore, with an
option to retain oversubscription of an additional Rs. 900 crore, making the
total issue size to be Rs. 1,000 crore. The company plans to use the issue
proceeds for the purpose of onward lending, financing, refinancing the existing
indebtedness and other general corporate purposes.



Interest Rate on Offer, Effective Yield & Tenor of the Issue – The issue will
carry coupon rate of 9% p.a. for a period of 60 months, 8.75% p.a. for 36 months
and 8.50% p.a. for 24 months. These rates would be applicable for annual and
cumulative interest payment options only. Monthly interest payment option is
available only for 60 months period and coupon rates for the same would be 8.65%
p.a., interest payable on a monthly basis.



Demat & ASBA Mandatory – Investors will not have the option to apply for these
NCDs in physical or certificate form as demat account is mandatory to invest in
these NCDs. Like equity IPOs, SEBI made ASBA mandatory to apply for these debt
issues also effective October 1, 2018. In case of physical applications, you
need to sign on the application form as per your bank records for ASBA.

Credit Rating & Nature of NCDs – CRISIL and ICRA have been appointed as the
credit rating agencies for this issue. Both CRISIL and ICRA have rated the issue
as ‘AA’ with a ‘Stable’ outlook. Moreover, these NCDs would be ‘Secured’ in
nature.



Categories of Investors – The company has decided to categorise investors in the
following four categories:

Category I – Institutional Investors – 10% of the issue is reserved i.e. Rs. 100
crore

Category II – Non-Institutional Investors (NIIs) – 10% of the issue is reserved
i.e. Rs. 100 crore

Category III – High Net Worth Individual Investors (HNIs) including HUFs – 40%
of the issue is reserved i.e. Rs. 400 crore



Category IV – Resident Individual Investors (RIIs) including HUFs – 40% of the
issue is reserved i.e. Rs. 400 crore

NRIs Not Allowed – Non-Resident Indians (NRIs), foreign nationals and qualified
foreign investors (QFIs) among others are not eligible to invest in this issue.

Allotment on First-Come First-Served Basis – Subject to the allocation ratio,
allotment will be made on a first-come first-served basis, as well as on a date
priority basis, i.e. on the date of oversubscription, the allotment will be made
on a proportionate basis to all the applicants of that day on which it gets
oversubscribed.



Minimum Investment – An investor needs to invest a minimum of Rs. 10,000 in this
issue i.e. 10 NCDs worth Rs. 1,000 each.

Listing, Premature Withdrawal – These NCDs are proposed to be listed on both the
stock exchanges, Bombay Stock Exchange (BSE) as well as National Stock Exchange
(NSE). The listing will take place within 6 working days after the issue gets
closed. Though there is no option of a premature redemption, the investors can
always sell these NCDs on either of the stock exchanges.

No TDS – As it is mandatory to have a demat account to apply and get these NCDs
allotted, no tax would get deducted at source on the interest payments. However,
as the interest income is taxable, you are supposed to disclose it while filing
your ITR.

But, in case you decide to close your demat account, you can get these NCDs
rematerialised. So, if rematerialised and held in physical form after the
allotment, and if the annual interest income is more than Rs. 5,000, TDS @ 10%
will be deducted.

Application Form of India Infoline Finance Limited NCDs

Note: As per SEBI guidelines, ‘Bidding’ is mandatory before banking the
application form, else the application is liable to get rejected. For bidding of
your application, any further info or to invest in IIFL Finance NCDs, you can
contact us at +91-9811797407

No related posts.

Author Shiv KukrejaPosted on January 3, 2023January 3, 2023Categories
Bonds/NCDs, FeaturedLeave a comment on IIFL Finance Limited 9% NCDs – January
2023 Issue
Featured


RBI’S 7.35% FLOATING RATE SAVING BONDS

This post is written by Shiv Kukreja, who is a Certified Financial Planner and
runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached
at shivskukreja@gmail.com

Investors often seek safe-havens for their hard earned money, and nothing could
be more safe than the securities which are issued by the government or the
central bank of a country. It is even better if the interest rates earned on
these investments are higher than some of the other investment options which are
not as safe and secured as these investments are.

One such investment available to the Indian investors is RBI’s 7.35% Floating
Rate Saving Bonds (FRSBs). These bonds are issued by the Reserve Bank of India
on behalf of the Govt. of India and are open for subscription throughout the
year. RBI has given authority to the State Bank of India (SBI), other
nationalised banks like Bank of Baroda, Canara Bank, Punjab National Bank (PNB),
Bank of India and Union Bank among others, and only four private sector banks,
namely HDFC Bank, ICICI Bank, Axis Bank and IDBI Bank, to accept applications
for these bonds.

Here are some of the other salient features of these bonds:

Coupon Interest (Floating) & Payment Dates

Interest payable on these bonds is 35 basis points (or 0.35%) per annum higher
than the interest payable on the National Saving Certificates (NSCs) which is
set and announced periodically by the Govt. of India. Effective January 1, 2023,
NSCs carry interest rate of 7% per annum. So, these bonds yield 7.35% per annum
to its investors.

This interest of 7.35% per annum is reset on a semi-annual basis based on the
fixation of interest rate on NSCs and payable on January 1 and July 1 every
year. Interest gets credited to the investor’s bank account electronically.

Who is eligible to invest in these bonds?


1. A person resident in India is eligible to invest in these bonds:
* in her or his individual capacity, or
* in individual capacity on joint basis, or
* in individual capacity on any one or survivor basis, or
* on behalf of a minor as father/mother/legal guardian


2. A Hindu Undivided Family (HUF) is also eligible to invest in these bonds.

Non-Resident Indians (NRIs) are not eligible to invest in these bonds. However,
if the holders of these bonds, subsequent to their investments, attain the NRI
status, then they can continue to hold on to their investments subject to the
provisions of the Foreign Exchange Management Act (FEMA) guidelines.

Investment Limit

There is no maximum limit for investment in these bonds. So, you can invest as
much as you want to.

Tax Treatment & Tax Deduction (TDS)

Interest earned by the investors on these bonds is fully taxable as per the tax
slab of the investor. Tax gets deducted at source while making periodical
interest payments. In case an investor is not liable to pay any tax in a
financial year, she/he may submit a declaration in order to avoid TDS deduction.

Issue Price & Minimum Investment Amount

These bonds carry a face value of Rs. 100, and issued for a minimum investment
amount of Rs. 1000 and in multiples thereof.

Mode of Issuance

These bonds are issued only in the electronic form and held at the credit of the
holder in an account called Bond Ledger Account (BLA), opened with the receiving
office of the intermediate bank. However, as a proof of subscription, a
certificate of holding is issued to the holder/s of these bonds.

Nomination

Investors may nominate one or more persons as nominee(s) while making their
investments, who in the event of death of the bondholder(s) would be entitled to
these bonds and the principal and interest payments due thereon. Even a minor
could be a nominee in these investments. However, nomination is not allowed if
the investment is made in the name of a minor, as such investments will have
parents or legal guardians to take care of the investment in case of untimely
demise of the minor investor. Investors may even make changes in their nominees
subsequent to their investments.

Transferability

These bonds are not transferable, except transfer to a nominee or legal heir in
case of death of the holder of these bonds.

Tradability & Collateral

Unlike tax-free and other taxable bonds, these bonds are not tradable in the
secondary markets and not even eligible as collateral for availing loans from
banks, NBFCs and other financial lenders.

Lock-In Period and Maturity

These bonds are issued for a period of 7 years and you cannot withdraw your
investment amount before this period if your age is less than 60 years. In other
words, premature encashment is allowed only if the investor is an individual and
aged above 60 years.

Lock-in period for investors in the age bracket of 60-70 years is 6 years from
the date of issue, while the same is 5 years for individuals aged between 70-80
years and 4 years for individuals aged 80 years and above. So, the shortest
lock-in period with these bonds is 4 years before which investors cannot
withdraw their money.

Our Take

Personally, I consider these bonds as one of the safest fixed income investments
for the Indian investors, with no or least volatility in their principal
investment amount as well as coupon interest rate. But, lack of liquidity with
no premature withdrawal is its biggest negative factor for a lot of investors.
If you need to invest your money for a medium to long term and don’t want to
take any risks, then these bonds are meant for you. Definitely go for them!

No related posts.

Author Shiv KukrejaPosted on December 31, 2022December 31, 2022Categories
Articles, Bonds/NCDs, FeaturedTags Best Fixed Income, Government of India,
RBILeave a comment on RBI’s 7.35% Floating Rate Saving Bonds


POST OFFICE SMALL SAVING SCHEMES, PPF – JANUARY 2023 INTEREST RATES

This post is written by Shiv Kukreja, who is a Certified Financial Planner and
runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached
at shivskukreja@gmail.com

The government has announced the interest rates on Post Office Small Saving
Schemes for the January-March 2023 quarter. The finance ministry made this
announcement yesterday only through a notification. The interest rates on
schemes like the Senior Citizen Savings Scheme (SCSS), National Savings
Certificate (NSC), Monthly Income Savings Scheme (MIS), Kisan Vikas Patra (KVP)
and 1-5 year time deposits have been hiked in the range of 0.20% to 1.10% per
annum.

However, interest rates on the Public Provident Fund, popularly called PPF,
Sukanya Samriddhi Yojana/Account (SSA), post office savings bank account and
recurring deposits have been left unchanged, leaving many of the investors quite
disappointed.

Here you have the table having all the small saving schemes with their
applicable interest rates and tax benefits for the quarter starting January 1,
2023:



Public Provident Fund (PPF) – Rate Left Unchanged at 7.10% – Leaving most
investors disappointed, interest rate on PPF, the most popular small savings
scheme, has been left unchanged at 7.10%. Interest earned on PPF is tax-free on
maturity and investment up to Rs. 1.50 lakh gets you tax exemption under section
80C.

Sukanya Samriddhi Yojana (SSY) – Rate Left Unchanged at 7.60% – Government’s pet
scheme for girl child, Sukanya Samriddhi Yojana, has also been left untouched
with interest rate fixed at 7.60%. So, the gap of 0.50% between this scheme and
PPF still exists, which should keep its popularity intact.

Interest earned on Sukanya Samriddhi Yojana is also tax-free on maturity and
investment up to Rs. 1.50 lakh gets you tax exemption under section 80C.

National Savings Certificates (NSCs) – Rate Hiked from 6.80% to 7% – There is
good news for the investors interested in National Savings Certificates (NSCs)
and RBI’s Floating Rate Bonds also, which are linked to the prevailing interest
rate on NSCs. The government has decided to increase interest rate offered with
NSCs from 6.80% to 7%. So, RBI Floating Rate Bonds, which carry coupon rate of
7.15% till now, will carry 7.35% with effect from January 1, 2023, 0.35% higher
than 7% interest NSCs will offer. Your investment in NSCs will keep giving you
tax exemption under section 80C.

Senior Citizens Savings Scheme (SCSS) – Rate Hiked from 7.60% to 8% – There is
some good news for the senior citizens at least. The interest rate on Senior
Citizen Savings Scheme has been increased to 8% from 7.60% earlier. The interest
earned on this scheme is taxable for its investors and subject to TDS as well.
However, your investment gets you a deduction of up to Rs. 1.50 lakh under
section 80C.

Post Office Monthly Income Scheme (POMIS) – Rate Hiked from 6.70% to 7.10% –
Post Office Monthly Income Scheme will also have an interest rate hike from an
earlier 6.70% to 7.10% p.a. Once favourite with its investors, this scheme has
become less favourable now.

Kisan Vikas Patra (KVP) – Tenure Reduced from 123 Months to 120 Months – Your
investment in KVP used to get doubled in a period of 123 months till now. With
effect from tomorrow, it will take 120 months for it to do the same. This scheme
will earn you 7.20% p.a. effectively.

Our take – Though it is a tough thing to digest for the small savers, especially
with PPF and Sukanya Samriddhi Yojana in which no changes have been made, I
think the government has done it rightly. It is a difficult task to keep
everyone happy in the country and at the same time, carry out economic reforms
for an overall development.

Inflation and interest rates have been going up for a while now. The government
has cautiosly increased interest rates on these small saving schemes, hoping
inflation to cool down at some point of time in the near future. This move will
send right signals to the global investors that the government is still serious
about keeping its borrowing costs and debt levels in check and removing
anomalies existent in the system.

No related posts.

Author Shiv KukrejaPosted on December 31, 2022January 3, 2023Categories
Articles, Featured, InvestmentsLeave a comment on Post Office Small Saving
Schemes, PPF – January 2023 Interest Rates


EDELWEISS FINANCIAL SERVICES 10.45% NCDS – JANUARY 2023 ISSUE

This post is written by Shiv Kukreja, who is a Certified Financial Planner and
runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at
shivskukreja@gmail.com

Edelweiss Financial Services Limited is going to launch its public issue of
secured and redeemable non-convertible debentures (NCDs) from January 3 i.e. the
coming Tuesday. The company expects to raise around Rs. 200-400 crore from the
issue.

It is going to offer interest rates between 9% to 10.45% per annum, with
maturity periods ranging between 24 months to 120 months. The issue will remain
open till January 23.

Salient features of the issue:

Size & Objective of the Issue – Edelweiss expects to raise Rs. 400 crore from
this issue, including the green-shoe option of Rs. 200 crore. The company plans
to use at least 75% of the proceeds for the repayment or prepayment of interest
and principal of its existing loans and the remaining proceeds for other general
corporate purposes.

Tenors & Coupon Rates on Offer – Edelweiss has decided to issue these NCDs for a
duration of 24, 36, 60 and 120 months. The company is offering interest rates in
the range of 9% to 10.45% per annum, with interest payable monthly, annually and
on a cumulative basis.



Higher Coupon Rate for Edelweiss Shareholders or NCD/Bond holders – Edelweiss
has also decided to offer an additional 0.20% p.a. to the shareholders of the
company and/or the holders of the NCDs/bonds issued by any of its subsidiaries
including ECL Finance Limited, Nuvama Wealth & Investment Limited, Edelweiss
Housing Finance Limited, Edelweiss Retail Finance Limited and Nuvama Wealth
Finance Limited. So, even if you hold one equity share of Edelweiss or an NCD of
any of the asssociate companies, you will get this additional rate of interest.

Categories of Investors & Allocation Ratio – The investors have been classified
in the following four categories and each category will have the below mentioned
percentage fixed in the allotment:

Category I – Institutional Investors – 10% of the issue

Category II – Non-Institutional Investors – 10% of the issue

Category III – High Networth Individuals (HNIs), including HUFs, investing more
than Rs. 10 lakhs – 40% of the issue

Category IV – Retail Individual Investors, including HUFs, investing Rs. 10
lakhs or less – 40% of the issue

NCDs will be allotted on a first-come first-served basis.

NRI Not Allowed – Non-Resident Indians (NRIs), foreign nationals and qualified
foreign investors (QFIs) among others are not eligible to invest in this issue.

Rating of the Issue – These NCDs have been rated “CRISIL AA-/Negative” by CRISIL
Ratings for Rs. 100 crore of the issue and “ACUITE AA-/Negative” by Acuite
Ratings & Research for Rs. 100 crore of the issue.

Demat & TDS – Demat account is mandatory to invest in these bonds, so the
investors will not have the option to apply these NCDs in physical form. Also,
the interest income would be taxable with these bonds. However, NCDs taken in
demat form will not attract any TDS.

Listing, Premature Withdrawal & Put/Call Option – The company is going to get
its NCDs listed on the Bombay Stock Exchange (BSE) within six working days from
the date of issue closure. The investors will not have the option to redeem
these bonds back to the company before the maturity period gets over, but they
can always sell these bonds on the stock exchange anytime they want. However,
liquidity remains an area of concern with such NCDs.

There is neither any put option with the investors of these bonds nor there is a
call option with the company to pay back early.

Minimum Investment – The investors will be required to apply for at least 10
NCDs in this issue which makes it a minimum investment of Rs. 10,000.

Registrar – KFin Technologies Limited has been appointed as Registrar to the
issue.

Application Form of Edelweiss Financial Services Limited NCDs

Note: As per SEBI guidelines, ‘Bidding’ is mandatory before banking the
application form, else the application is liable to get rejected. For bidding of
your application, any further info or to invest in Edelweiss Financial Services
Limited NCDs, you can contact us at +919811797407

No related posts.

Author Shiv KukrejaPosted on December 31, 2022December 31, 2022Categories
Articles, Bonds/NCDs, FeaturedLeave a comment on Edelweiss Financial Services
10.45% NCDs – January 2023 Issue


A GOOD CREDIT CARD FOR NRIS BASED OUT OF US WHO FLY OVERSEAS FREQUENTLY

Before getting into the content of the post, let me very briefly state my
personal plans for blogging, and the rationale behind those plans.

I gave up on blogging a few years ago because I was outside India for a very
long time, and found myself out of touch with the Indian markets, and found it
difficult to write about Indian personal finance.

Shiv kept the blog alive, and in some ways OneMint kept itself alive as I am
quite consistently surprised at the traffic the blog still gets, and its
resilience. I have always missed blogging, but due to the lack of a clear
purpose in my head I wasn’t able to commit myself to it again.

That has changed in the last month or so, and I have decided to resume writing
once again with a focus on NRIs in the US, as this is the area most familiar to
me because I am one myself, and I hope to write about one post per week and
answer all comments.

With that said, let me get to the content of the post itself.

I booked a number of long distance air tickets recently, and wondered why I
don’t have a travel credit card? A quick search revealed that the Chase Sapphire
Preferred Credit Card is one of the most popular and recommended credit cards
for people who travel a lot. This is not a free credit card, and comes with an
annual fee of $95, and prior to getting this card I didn’t have any other card
on which I paid a fee.

So, why did I choose to get this card? For starters, they have a sign up bonus
of $600 that you can get if you spend $4,000 in the first four months. I know
that I will be able to get this bonus, as I have some big ticket purchases
planned in the near future, so that pretty much means that even if I do nothing
else with the card the fee will be paid for by the bonus itself.

But that’s not really a reason to get the card. The reason I was attracted to
the card is that they give you one point for every dollar you spend, where one
point is equal to one cent, so a 1% cashback on all purchases.

But more importantly they give 2 points on all travel and dining purchases which
can really add up when you consider the high cost of overseas tickets, and you
can also use these points to book tickets from their portal and transfer them as
miles to partner airlines. You also get 25% more rewards when you redeem your
points through Chase Ultimate Rewards but I am not sure how that practically
works. I do however have a friend who has done this and told me it works
seamlessly, so I am looking forward to try this out myself as well.

The interest rate on the card is really high, so you should definitely pay off
the balance if you intend to get this card, and I have read some really bad
reviews about people trying to claim insurance on canceled trips, so that wasn’t
a factor in my decision to getting this card.

I will write a follow up post once I start using this card, and more importantly
once I redeem a reward and see how it practically works, but for now I am
looking forward to my new credit card.

Please leave a comment if any of you have this card, and what your experience
with it has been, and if you have any other travel card that you think is better
than this one, especially one that gives you international lounge access as
that’s one thing that I wanted but this card didn’t have.

No related posts.

Author Shiv KukrejaPosted on December 15, 2019December 24, 2022Categories
NRILeave a comment on A good credit card for NRIs based out of US who fly
overseas frequently


BOOK REVIEW – MODIFYING INVESTOR BEHAVIOR – IT NOT A NUMBER GAME IT’S A MIND
GAME

My good friend – Hemant Beniwal of the The Financial Literates recently
published a new book, and I just finished reading it this morning.

This is a fantastic book, and I can whole heartedly recommend it to anyone
interested in improving their finances.

Hemant has written an easy to understand book with powerful concepts that are
very important in your journey to invest better, and be financially secure.

The book is divided into ten messages and Hemant provides commentary on all of
his messages and I can say that I agree with every one of them.

Here is a picture from his book about his commandments.

I will write about numbers 1, 2, 6 and 8 here just because they are closer to my
heart than the other topics.

Equity is the best asset class: From my own experience I can say that I agree
very much with this statement. If you are investing in equities for a long
period of time then they will in all likelihood exceed returns from every other
asset class. Understanding equity in the sense of buying a business, and then
holding on to it makes it easier to own stocks for very long, and in this manner
you can emulate some of the top investors in the world.

Hemant has written a very nice chapter on why you can’t imitate a Warren Buffett
or Peter Lynch, and I agree with that too. You won’t ever have the same access
to a float that Warren Buffett had or the ability to pour through annual
reports, but by modeling your thinking on the way he thought you can certainly
benefit from investing the way he did.

Timing is impossible: This is also an important subject, and Hemant has captured
it quite beautifully and simply. It is just not humanly possible to time the
market, but the good news is that you don’t need to. You need to invest for the
long term and do it consistently. That will be the key to returns, not buying on
dips, and selling on highs.

Bear markets are a true friend: People who don’t invest consistently or who
haven’t seen bear markets often panic when the markets crash, and sell out
everything at a loss. This is the opposite of what you need to do if you need to
make money in the market. Don’t Panic is the mantra.

Investing is simple, but not easy: I think this is the essence of the book.
Hemant propounds principles that have been known to us for decades, and have
proven to work. You don’t need to be an astro physicist to understand them. Why
then do so few people follow it? Because they aren’t easy. When every ‘expert’
on TV is talking about crashes and panics how can you hold on to your stocks
then? Some things about investing are counter intuitive until you internalize
them and see them work in your own portfolios, and at that time it becomes
second nature to you.

Conclusion

This is a very good book written by an honest, and sincere professional that
everyone can benefit from. The book resonates with me deeply because I have seen
these principles work in my own investments over a decade through even the great
recession, and countless crashes before and after that.

Please spend the few hours needed to read Modifying Investor Behavior – It not a
Number Game It’s a Mind Gameand apply it to your own investing life.

No related posts.

Author Shiv KukrejaPosted on March 18, 2019December 24, 2022Categories
ArticlesLeave a comment on Book Review – Modifying Investor Behavior – It not a
Number Game It’s a Mind Game


MUTHOOT FINANCE 10% NCDS – FEBRUARY 2019 ISSUE

This post is written by Shiv Kukreja, who is a Certified Financial Planner and
runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at
shivskukreja@gmail.com

Muthoot Finance has launched its latest public issue of secured, redeemable,
non-convertible debentures (NCDs) from today, February 14, 2019. The company
plans to raise Rs. 750 crore from this issue, including the green-shoe option to
retain oversubscription of Rs. 650 crore. These NCDs will carry coupon rates
between 9.25% for 24 months and 10% for 60 months.

Maturity period will range between 24 months to 60 months, having monthly,
annual and cumulative interest payment options. The issue is scheduled to remain
open for a month to close on March 14, 2019. However, in case of
oversubscription above Rs. 100 crore, the company has the right to close it
prematurely.

Here are the salient features of the issue you should consider before taking a
decision to invest or not:

Size of the issue – Base size of the issue is Rs. 100 crore and the company will
have the option to retain oversubscription to the tune of Rs. 750 crore,
including the green-shoe option of Rs. 650 crore.

Minimum Investment – Investors are required to apply for a minimum of ten bonds
of Rs. 1,000 face value i.e. an investment of at least Rs. 10,000.

Interest Rate on Offer, Effective Yield & Tenor of the Issue – The issue will
carry coupon rate of 10% p.a. for a period of 60 months, 9.75% p.a. for 38
months and 9.50% p.a. for 24 months. These rates would be applicable for annual
interest payment options only. Monthly interest payment option is also available
and coupon rates for these periods are 9.75% p.a., 9.50% p.a. and 9.25% p.a.
respectively.

You can check the rates offered for different maturities and different payment
options from the table below:



Categories of Investors & Allocation Ratio – The investors have been classified
in the following four categories and each category will have certain percentage
fixed for the allotment:

Category I – Qualified Institutional Buyers (QIBs) – 20% of the issue is
reserved i.e. Rs. 150 crore

Category II – Non-Institutional Investors & Corporates – 20% of the issue is
reserved i.e. Rs. 150 crore

Category III – High Net Worth Individuals (HNIs) & HUFs investing more than Rs.
10 lakhs – 30% of the issue is reserved i.e. Rs. 225 crore

Category IV – Retail Individual Investors, including HUFs investing up to Rs. 10
lakhs – 30% of the issue is reserved i.e. Rs. 225 crore

Allotment on First-Come First-Served Basis –Allotment will be made on a
first-come first-served basis, as well as on a date priority basis i.e. on the
date of oversubscription, the allotment will be made on a proportionate basis to
all the applicants of that day on which it gets oversubscribed.

NRI/QFI Investments – Non-Resident Indians (NRIs), foreign nationals and
Qualified Foreign Investors (QFIs) among others are not allowed to invest in
this issue.

Ratings & Nature of NCDs – CRISIL and ICRA, the two rating agencies involved in
this issue, have assigned ‘AA/Stable’ rating to the issue, indicating the issue
to be safe as far as timely payments of interest and principal investments are
concerned. As mentioned above as well, all these NCDs are ‘Secured’ in nature.

Demat Account Mandatory – The company has decided to issue these NCDs
compulsorily in demat form. So, if you don’t have a demat account, you won’t be
able to apply for these NCDs.

Taxability & TDS – No TDS in Demat Form – Interest income with these NCDs is
taxable in the hands of the investors and you will have to pay tax on the
interest income while filing your income tax return. Moreover, as demat account
is mandatory to invest in this issue, no TDS would get deducted from your
interest income on NCDs held in demat form.

But, in case you decide to close your demat account, you can get these NCDs
rematerialised. So, if rematerialised and held in physical form after the
allotment, and if the annual interest income is more than Rs. 5,000, TDS @ 10%
will be deducted.

Listing, Premature Withdrawal – Muthoot has decided to get its NCDs listed only
on the Bombay Stock Exchange (BSE). Allotment as well as listing of these NCDs
will happen within 6 working days from the closing date of the issue. There is
no option of a premature redemption back to the company, but the investors can
always sell these NCDs on the stock exchange to encash their investments.

Should you invest in Muthoot Finance NCDs?

Financial results declared by both the gold-financing companies, Manappuram
Finance and Muthoot Finance, have been above analysts expectations for the two
straight quarters in a row. So, from the fundamentals point of view, both these
companies are doing good and it seems there is no immediate threat to their
business model due to the recent NBFC liquidity crisis, as well as the NPA
issues.

The interest rates offered by Muthoot this time around are exactly 1% higher as
compared to its previous issue of April 2018. Given the fundamentals are still
strong and the asset quality too is not deteriorating in any negative manner,
the interest rates on offer look reasonable.

However, the point again is whether one should take risk with these NBFCs for a
slightly higher rate of interest these companies are offering. The answer is
‘No’, if you have a limited amount to capital to invest and it is your hard
earned money you need to invest to achieve any of your long term financial
goals. You should also avoid it if you are in a higher tax bracket.

I also have a view that you should not make more than 5-10% of your debt
investment with any one such private company. So, if you have already invested a
sizable amount with Muthoot, then you should avoid increasing your exposure
here. Investors, who understand risk with such debt investments and are not
liable to pay high tax on their taxable investments, can consider investing in
these NCDs.

Application Forms – Muthoot Finance NCDs

Note: As per SEBI guidelines, ‘Bidding’ is mandatory before banking the
application form, else the application is liable to get rejected. For bidding of
your application, any further info or to invest in Muthoot NCDs, you can contact
us at +91-9811797407

No related posts.

Author Shiv KukrejaPosted on March 14, 2019December 24, 2022Categories
ArticlesLeave a comment on Muthoot Finance 10% NCDs – February 2019 Issue


L&T FINANCE 9.35% NCDS – MARCH 2019 ISSUE

This post is written by Shiv Kukreja, who is a Certified Financial Planner and
runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at
skukreja@investitude.co.in

L&T Finance is going to launch its public issue of secured, redeemable,
non-convertible debentures (NCDs) from this coming Wednesday, 6th of March. The
company plans to raise Rs. 1,500 crore from this issue, including the green-shoe
option to retain oversubscription of Rs. 1,000 crore. These NCDs will carry
coupon rates between 8.89% for 60 months and 9.35% for 120 months.

Maturity period will range between 37 months to 120 months, having monthly,
annual and cumulative interest payment options. The issue is scheduled to remain
open for 15 days only to close on March 20, 2019. However, in case of high
demand for these NCDs and raising Rs. 1,500 crore before 20th March, the company
might close it prematurely.

Here are the salient features of the issue you should consider before taking a
decision to invest or not:

Size of the issue – Base size of the issue is Rs. 500 crore and the company will
have the option to retain oversubscription to the tune of Rs. 1,500 crore,
including the green-shoe option of Rs. 1,000 crore.

Minimum Investment – Investors are required to apply for a minimum of ten bonds
of Rs. 1,000 face value i.e. an investment of at least Rs. 10,000.

Interest Rate on Offer, Effective Yield & Tenor of the Issue – The issue will
carry coupon rate of 9.35% p.a. for a period of 120 months, 9.25% p.a. for 60
months and 9.10% p.a. for 37 months. These rates would be applicable for annual
interest payment options only. Monthly interest payment option is also available
with 120 months and 60 months, and coupon rates for these periods would be 8.98%
p.a. and 8.89% p.a. respectively.

You can check the rates offered for different maturities and different payment
options from the table below:



Categories of Investors & Allocation Ratio – The investors have been classified
in the following four categories and each category will have certain percentage
fixed for the allotment:

Category I – Qualified Institutional Buyers (QIBs) – 20% of the issue is
reserved i.e. Rs. 300 crore

Category II – Non-Institutional Investors & Corporates – 20% of the issue is
reserved i.e. Rs. 300 crore

Category III – High Net Worth Individuals (HNIs) & HUFs investing more than Rs.
10 lakhs – 30% of the issue is reserved i.e. Rs. 450 crore

Category IV – Retail Individual Investors, including HUFs investing up to Rs. 10
lakhs – 30% of the issue is reserved i.e. Rs. 450 crore

Allotment on First-Come First-Served Basis –Allotment will be made on a
first-come first-served basis, as well as on a date priority basis i.e. on the
date of oversubscription, the allotment will be made on a proportionate basis to
all the applicants of that day on which it gets oversubscribed.

NRI/QFI Investments – Non-Resident Indians (NRIs), foreign nationals and
Qualified Foreign Investors (QFIs) among others are not allowed to invest in
this issue.

Ratings & Nature of NCDs – ICRA, CARE and India Ratings, the three rating
agencies involved in this issue, have assigned ‘AAA/Stable’ rating to the issue,
indicating the issue to be safe as far as timely payments of interest and
principal investments are concerned. As mentioned above as well, all these NCDs
are ‘Secured’ in nature.

Demat Account Mandatory – The company has decided to issue these NCDs
compulsorily in demat form. So, if you don’t have a demat account, you won’t be
able to apply for these NCDs.

ASBA Mandatory – Like equity IPOs, SEBI has made ASBA mandatory to apply for
debt issues also, effective October 1, 2018. So, you are no longer required to
issue cheques to apply for these NCD issues. In case of physical applications,
you just need to sign on the application form as per your bank records.

Taxability & TDS – No TDS in Demat Form – Interest income with these NCDs is
taxable in the hands of the investors and you will have to pay tax on the
interest income while filing your income tax return. However, as demat account
is mandatory to invest in this issue, no TDS would get deducted from your
interest income on NCDs held in demat form.

But, in case you decide to close your demat account, you can get these NCDs
rematerialised. So, if rematerialised and held in physical form after the
allotment, and if the annual interest income is more than Rs. 5,000, TDS @ 10%
will be deducted.

Listing, Premature Withdrawal – L&T Finance has decided to get its NCDs listed
on both the stock exchanges, Bombay Stock Exchange (BSE) as well as National
Stock Exchange (NSE). Allotment as well as listing of these NCDs will happen
within 6 working days from the closing date of the issue. There is no option of
a premature redemption back to the company. However, the investors can always
sell these NCDs on the stock exchanges to encash their investments.

Should you invest in L&T Finance 9.35% NCDs?

What we have seen recently in the cases of IL&FS and especially DHFL, it has
taught us that nothing is permanent in the financial world and things could
change very quickly with any of the private lenders. It doesn’t mean that we
should never invest with private companies. I just want to reiterate here that
one should be mentally prepared for any kind of adverse event with private
companies, and enough research should be done before you hand over your
hard-earned money to these private companies.

L&T Finance is a fundamentally sound company and has the brand name of L&T to
generate trust with its investors. Probably that is why also it has been rated
‘AAA’ by the rating agencies. But, after all it is a private company. As I have
expressed my views earlier as well, one should invest in such debt instruments
of private companies for the shortest maturity period, and here 120 months is a
very long period of investment with a private company. So, personally I would
advise my clients to avoid such a long period of investment with L&T Finance. If
you trust L&T Finance more than any other private lender, then you should go
with 60-months tenor, otherwise there is not much difference in interest rates
of 60 months and 37 months tenors. So, ideally one should invest for 37 months
only.

On the other hand, more conservative investors should wait for the NHAI issue
details to get announced. God knows why, but the wait for the NHAI issue has
been longer than what I initially expected. I hope they issue their bonds this
month itself, otherwise I don’t think their issue will see the light anytime
before the elections get over and it could even get delayed by 2-3 months after
the new government gets going.

Application Forms – L&T Finance NCDs

Note: As per SEBI guidelines, ‘Bidding’ is mandatory before banking the
application form, else the application is liable to get rejected. For bidding of
your application, any further info or to invest in L&T Finance NCDs, you can
contact us at +91-9811797407

No related posts.

Author Shiv KukrejaPosted on March 4, 2019December 24, 2022Categories
ArticlesLeave a comment on L&T Finance 9.35% NCDs – March 2019 Issue


BHARAT 22 ETF – FEBRUARY 2019 ADDITIONAL OFFER

This post is written by Shiv Kukreja, who is a Certified Financial Planner and
runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at
shivskukreja@gmail.com

ICICI Prudential AMC has launched an additional offer for Bharat 22 ETF in order
to raise a minimum of Rs. 3,500 crore for the government to meet its
disinvestment target for FY 2018-19. This additional offer will remain open for
today only and the company will accept its applications till 8 pm in the evening
today.

As the name suggests, Bharat 22 ETF has 22 companies as its constituents, 3 of
which are private companies – Axis Bank, ITC and L&T, and rest 19 are public
sector enterprises, few of them are ONGC, SBI, IOC, Coal India, NTPC, Power
Grid, BPCL and GAIL.

Bharat 22 ETF closely tracks “S&P BSE Bharat 22 Index”. This index has been
designed by the Bombay Stock Exchange (BSE) in consultation with the government.

Before we check how the issue looks from an investment point of view, let us
take a look at some of its key features:

Investment Objective – Bharat 22 ETF intends to generate returns that closely
correspond to the total returns earned by the securities as represented by the
Bharat 22 Index. However, the performance of the scheme may differ from that of
Bharat 22 Index due to tracking error and also due to the scheme expenses.

Offer Timeline – Unlike its NFO in November 2017, this additional offer will
remain open for just one day only i.e. today, January 14, 2019. It is a very
short period of time provided for this investment, but that is how it should be
for the offers for sale (OFS) and exchange traded funds (ETFs).

Reference Market Price/NAV – As Bharat 22 ETF is already listed on the stock
exchanges, you will not get its units allotted at its face value of Rs. 10. Its
last trading price on the NSE today was Rs. 32.98. So, the investors should
expect the allotment price to be around this price only, adjusted for a discount
of approximately 3.9% for the individual investors.

The daily NAV of this scheme is based on the Bharat 22 Index, and the allotment
price would be approximately equal to 1/100th of Bharat 22 Index and calculated
post adjusting approx. 3.9% discount offered by the government to Bharat 22 ETF
for buying the underlying Bharat 22 Index shares.

Approximately 3.9% Discount for Investors – Investors making an investment
during the offer period will be given a discount of approximately 3.9% on their
investment. Yes, you have read it right here. The discount you must have heard
or read elsewhere would have been 5%. But, actually it is not 5%. The government
is offering 5% discount to the investors of the ETF on the shares of the
companies to be sold by the government. These are 20 such companies which carry
a cumulative weightage of 78% in the Bharat 22 ETF. There will be no such
discount on the remaining 2 companies, which carry a cumulative weightage of 22%
in the Bharat 22 ETF.

Target Amount to be Raised – The government is targeting to raise Rs. 3,500
crore from this offer. However, in case of oversubscription, the government
would like to retain the whole of oversubscription in order to bridge its
disinvestment target gap. So, it is highly likely that full allotment will be
made to the investors.

Minimum/Maximum Investment Size – Retail individual investors can invest in the
scheme with a minimum investment amount of Rs. 5,000. To remain a retail
investor, the investment limit has been set at Rs. 2 lakhs.

Demat Account Mandatory – As you cannot hold and trade ETFs in physical form, it
is mandatory to have a demat account for you to invest in this scheme.
Applications without relevant demat account details are liable to be rejected.

No Lock-In Period – As this is an ETF which gets traded on the stock exchanges,
the investors can sell these units anytime post allotment.

Should you invest in Bharat 22 ETF Additional Offer?

Indian markets have underperformed the global markets by a huge margin this
calendar year. We are down by approximately 3.5% year to date, as compared to an
average positive return of 7% in global markets. But, this negative 3.5% too
does not reflect the true picture of the kind of bloodbath we are having in our
markets. Many of the mid-cap and small-cap stocks are trading below their 2014
levels, and many of them are down 50-80% from their January 2018 highs. It has
been a very painful period for the investors post January 2018. So, if there is
any stock or fund or a portfolio which has given a positive return, or has
fallen less than 10% in the past 1 year or so, then the investors of that stock
or fund or portfolio should actually thank God for saving their hard earned
money.

This Bharat 22 ETF too has fallen less than 10% in the past one year, and I was
really surprised to know that. Actually, Axis Bank and ITC have given positive
returns in the past one year, and these two are the only stocks in this Bharat
22 ETF which have succeeded to remain in the green, while L&T and all its public
sector enterprises have given negative returns.

When Bharat 22 ETF was launched in November 2017, most of its constituents were
trading close to their 52-week highs, the momentum was favoring the stock
markets, there was buoyancy all around and the government successfully raised
Rs. 17,000 crore. The picture is pretty much different this time around. Most of
its constituents are trading close to their 52-week lows, the momentum is not
favoring the stock markets at all, there is pessimism all around and the
government is targeting to raise only Rs. 3,500 crore, and might even fail to
raise that.

Like earlier as well, I think it is the government’s policies which are going to
drive the share prices of these companies and thereby this ETF. If you have a
view that Modi government has done a good job for the country and its economy,
and it could win the general elections in May 2019, then you should invest in
this ETF for the medium to long term. However, if you think it is difficult for
the BJP to make a comeback this time around, then I think you would do better to
skip it for now, and wait for the markets to suffer a fall due to a knee-jerk
reaction to the elections outcome and then deploy your money for long-term
wealth creation.

ICICI Prudential Bharat 22 ETF Application Form

No related posts.

Author Shiv KukrejaPosted on February 14, 2019December 24, 2022Categories
ArticlesLeave a comment on Bharat 22 ETF – February 2019 Additional Offer


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