Will there will be any risk factor by purchasing and holding the NCDs (secured or non secured) for a long period?
Will you please tell me whether the NCDs like SCUF are covered by Insurance just like the Fixed deposits of a Bank are covered by Insurance upto Rs.100000/- and recently the policy is changed to cover upto Rs.500000/-.
i dont know the ans whether interest rate is peaked or not but i know one thing that no other fixed income securities is going to offer 13% for AA rating so why wait for interest rate peaking up dont worry about gmp but i think if iifl bond trade at par it will trade @ +10 for sure
12.1% is very very good return for 5 years, if one can set aside some money for 5 years and invests that in this ncd and also reinvest the interest from this ncd in this bond itself year after year of in a fd to be recievable after 5 yrs from now one will get around 15% return ( not cagr).
the ipo market now has become speculator market........ if we are hoping that we will get one good ipo every month to apply and return per 2 lac application will be 2000 then looking at the performance of ipos after coal india we are asking too much...
on the other hand this bond on an investment of 2 lac will give 2100 month after month for next 5 years and option to withdraw ur money anytime, we may debate the risk portion but the group is not going to default for sure but who knows ???
in my opinion return from this 5 yr bond is as follows-
interest from the co = 12.1% annual commsn from broker 1.25% = 0.25% annual reinvestment of int @ 10% = 2.5% annual for 5 years compounding