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Shriram Transport Finance Company Limited NCD - Public Issue

Discussion in 'Mutual funds and Exchange Traded Funds' started by real_buzz, Jul 17, 2013.

  1. real_buzz Moderator

    Public Issue by Shriram Transport Finance Company Limited Secured Redeemable Non Convertible Debenture (NCD). The Public Issue have been rated AA+ by CARE & AA / Stable by CRISIL

    The Public Issue’s details and the brief Term Sheet is given below

    Details Particulars
    Issue Size Rs.375 Crores with an option to retain over subscription up to Rs.375 Crores
    Issue Opens 16th July 2013
    Issue Closes 29th July 2013
    Listing Proposed to be listed in BSE & NSE
    Mode of Allotment Both Physical & Demat Form
    Trading In Dematerialized Form only
    Face Value of the NCD Rs.1000
    Minimum Application Rs.10,000 (10 NCD’s)
    Additional Investment In Multiples of Rs.1000 (1 NCD)
    Basis of Allotment First Come First Serve Basis
    Interest on Application 9.00% per annum
    Interest on Refund Money 2.50% per annum

    Term Sheet

    SERIES
    I
    II
    III
    IV
    V
    Frequency of Interest Payment
    Annual
    Annual
    Monthly
    Cumulative
    Cumulative
    Interest (% per annum) For Individuals Only
    9.65%
    9.80%
    9.40%
    NA
    NA
    Additional Incentive on Interest (% per annum) For Individuals Only
    1.25%
    1.35%
    1.23%
    NA
    NA
    Total Interest (% per annum) For Individuals Only
    10.90%
    11.15%
    10.63%
    NA
    NA
    Yield ( % per annum) For Individuals Only
    10.90%
    11.15%
    11.15%
    10.90%
    11.15%
    Tenor
    3 Years
    5 Years
    5 Years
    3 Years
    5 Years

    Our Suggestion
    The interest rate offered in both the 3 years and 5 years category is very attractive for individuals when compared to secondary AA+ NBFC yield curve. Currently 3 years AA+ NBFC paper is going at 9.30% to 9.35% levels and 5 years paper is going at 9.45% to 9.50% levels in the secondary market. Besides the Bank FD rates are in the region of 8.75% to 9.00% levels

    One should consider holding this investment till maturity or consider an exit after 1 year ex interest, with good premium if interest rates drop at that time, through selling in the secondary market

    Please find attached the AA+ NBDFC Yield Curve to compare the interest rate offered by the issuer




    Since the issue size is not very large, we suggest you to apply at the earliest from July 16th 2013 to facilitate better chances of allotment

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