In every debt instrument which is traded on exchanges there is a chance of capital getting ERODED as interest rates move or rating of that security moves.no debt instrument guarantees capital protection.Also this particular INVIT has fallen because people are using it for trading purpose and not as debt paper.I was reading in this column prior to listing and everyone was speculating on listing gain.This is NOT a Share it''s a debt instrument for earning 8 to 12% P.A.
I appreciate that you shared these views here. As truly pointed out, these investment instruments are for HNIs and above as well as debt fun houses for whom fetching such interest (almost risk free) is of attraction, and that too accredited with top notch ratings. Its the wave of IPO listing gains which brought in normal investors into this, although the regulator didn''t wanted this to happen and hence kept higher minimum bids. These are similar to bonds whose market value in-principle may respond with open market interest rates. Those who took wrong decision has to wait, take some dividends and let it ripe with time to easy exit at no loss, otherwise book some minimal loss and take the learning. But just cursing such (good)funds will not help.
Hello, should we hold IRB or sell it. Its going down on daily basis, does anybody have any insider knowledge or insight about its prospects? Please share.
In case QIB IPO Subscription data, just to understand, 11 people were willing to buy the units of IRB at Rs. 102 (even after a waiting period of around 15 days to list). Of which only 1 is allotted. Now, those remaining 10 are not ready buy even at 101 or less with readily listed confirm delivery. Nobody could understand the product ? Can any logic explain this ?
It is because for the buyer at 101 the equivalent price is about 102( assuming 1% brokerage). Now the the returns expected is 9-11% annual. when selling the units again 1% brokerage, and capital gain tax. so the right price to buy will be around 98-100 levels I think..