Anyone have done the research "which one is better"?
Manappurum NCD or Muthoot finance NCD in the current offer?
Alchemist, are you thinking to park in any?
And which one is more secured?
Happy Investing!
Most likely I will not apply for Manappurum NCD. The reason being it is short term. I do not have money in my saving account. If I consider cost of money as 1% and listing premium as 3%. I will gain only if I get at least 1/3rd allotment.
Regardng Muthoot Finance, I have not thought what to do. If i get my money for Shriram City before this issue then I will apply for the same.
Most likely I will not apply for Manappurum NCD. The reason being it is short term.
In this case you will get your capital soon and you can use somewhere after 2 years. Interest rate is also attractive. Why need to wait for 5 years? I am only concern about their fundamental. That what I asked whether one should apply or not.
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If I consider cost of money as 1% and listing premium as 3%. I will gain only if I get at least 1/3rd allotment.
So you only think of listing gain and want to sell on listing day if suppose you have money? why not long term?
Quote:
Regarding Muthoot Finance, I have not thought what to do. If i get my money for Shriram City before this issue then I will apply for the same.
So in your opinion Muthoot finance NCD is more secure or you apply because they offer for 5 years?
In this case you will get your capital soon and you can use somewhere after 2 years. Interest rate is also attractive. Why need to wait for 5 years? I am only concern about their fundamental. That what I asked whether one should apply or not.
So you only think of listing gain and want to sell on listing day if suppose you have money? why not long term?
So in your opinion Muthoot finance NCD is more secure or you apply because they offer for 5 years?
Happy Investing!
I can easily get more than 11% interest in other Shriram Transport NCD. For example if you opt for SRTRANSFINNC, you can get it for approx Rs 1000. The interest rate is 10.5% but you will get interest from 1st April. My assumption is if I am getting 11%, there is no gain. Anything above 11% is gain for me.
In case of Mannapuram finance, I will get 1.2% extra than minimum 11%. So it is 2.4% extra in 2 years.
I dont have any money in my saving account. In case I want to apply for Rs 3 lakh, my cost of arranging that money will be 3000. I may get allotment only for Rs 1 lakh. My gain is Rs 2400 whereas my cost is Rs 3000.
I dont have any idea which one is more secure. I think rating for both these are similar.
In case of Muthoot Finance, If am gaining 1.2% extra per year for 5 years, I will gain around 6%. Morever, Interest rates are likely to go down. So the benefit in long term NCDs is more than short term.
Last edited by rajivka : 15th August 2011 at 11:06 PM.
I received only Rs 90 from Manappuram in my bank a/c by ECS. I did not understand, is this the refund of my 50k that I invested or just only interest of refund?
If that is the case then I haven't received refund yet. Anyone received?
I think it would be more clear after checking the application status.
I received only Rs 90 from Manappuram in my bank a/c by ECS. I did not understand, is this the refund of my 50k that I invested or just only interest of refund?
Most probably, you got 100% allotment and this is just the interest on application money.
From the RHP of Manappuram Finance NCD Issue:
Quote:
Application Interest
Interest on Application money on the amount allotted, subject to deduction of income tax under the provisions of the Income tax act, 1961, will be paid separately by the Company @ 7% p.a. for all categories of Applicants for all Series of Bonds, to Allottees and the same should not be deducted from the amount on application. The interest shall be payable from the Pay-In Date, and shall be payable until one day prior to the Deemed Date of Allotment.
I guess many people apply for listing gains. Once the price goes down, the sentiments become negative and people start selling their NCDs.
I think there is no need to panic. In fact, if you have more money consider this as an opportunity to buy more.
I don't have any money left otherwise I would have bought it from market.
I didn't invest in it. But was curious to know why debt products like this goes down. as you pointed out I think nothing other than selling spree is the answer.
Too bad. Anyway have to hold for 2 years as its for long term.
If we buy from market now then it also would be the same interest rate and same maturity date as got on offer?
Happy Investing!
Yes. if you buy from the market, the same maturity (in fact less since from listing till days the days gone will reduce the total maturity time ) with the same coupon amount.
Why this went on discount? 12% + interest rate. Does market expects the interest to go up more than 12%+ in the next 2 years?
There could be various reasons why these NCDs are trading at a discount.
- Short-term players may have applied for listing gains and sold at a discount to free their money.
- Some investors may have felt that they can get better returns elsewhere and thus exited.
- Buyers may be unwilling to buy the NCDs because they feel the yield at face value is not enough for the risk associated with these NCDs.
Quote:
Originally Posted by San Yad
If we buy from market now then it also would be the same interest rate and same maturity date as got on offer?
Interest rate (coupon rate) and the maturity of the NCDs are fixed.
These are independent of the market rate of the NCDs.
The yield for the buyer depends on the price at which the buyer buys the NCDs.
Quote:
Originally Posted by San Yad
Will it go further down or stabilize around today's price?
I think the price should stabilize at current level.
Where the interest payment dates for mentioned for option -2? As interest will be paid twice a year, does this mean it will be paid once on 1-Apr and then after 6 months on 1-Oct?
Also from which date interest will be calculated - Issue Opening date or Allotment date or Listing Date?
Tried to look in their prospects, but couldn't find. If some has this data , please let me know the source as well.
Where the interest payment dates for mentioned for option -2? As interest will be paid twice a year, does this mean it will be paid once on 1-Apr and then after 6 months on 1-Oct?
Also from which date interest will be calculated - Issue Opening date or Allotment date or Listing Date?
Interest in calculated from allotment date.
I am not sure when the interest will be paid.
From the offer document:
Quote:
9.2 Calculation of Interest
Series II Bond
9.1.2 Interest on the Series II Bonds at the rate mentioned above will be paid semi-annually from the Deemed Date of Allotment.
9.1.3 For the first six month period, the interest shall be calculated from the Deemed Date of Allotment to the last day of the six month period, both days inclusive.
9.1.4 For the subsequent six month periods (except the six month period in which the Maturity Date falls),the interest shall be calculated from the first to the last day of the six month period, both days inclusive.
9.1.5 For the six month period in which the Maturity Date falls, the interest shall be calculated from the first day of the six month period to one day prior to the Maturity Date, both days inclusive.
If you are thinking of holding till maturity (not going to trade and hence price fluctuations do not matter) , isn't the cumulative interest bond (no regular coupon payments) the best option? Because even though the other coupon paying bonds have higher yields, they are assuming that we re-invest the coupon payments at 12.5% which is not always possible.
On the other hand, cumulative bonds are giving an actual yield of 12%.
Is this thinking right?
PS :- Where can I find the Bonds (and their features) as per their NSE / BSE tickers because I intend to buy some at discount and don't really know what I'm buying just from the ticker names?
Because even though the other coupon paying bonds have higher yields, they are assuming that we re-invest the coupon payments at 12.5% which is not always possible.
On the other hand, cumulative bonds are giving an actual yield of 12%.
Is this thinking right?
PS :- Where can I find the Bonds (and their features) as per their NSE / BSE tickers because I intend to buy some at discount and don't really know what I'm buying just from the ticker names?
Your thinking is correct.
I can't think of any one source where you can find all the details. I may make such a list in future, but it is a time-consuming task.
For most of the recent listing of fixed instruments, The details in their respective threads. Please check them.
For this particular NCD issue, the details can be found in post #10.
If you need details of any particular company's NCDs, post in the respective thread and I will surely get the details for you.
As per my knowledge, the interest payment date is 8th March for 2 year bonds. Record date is 3 days before the interest payment date. It is around 1 month left for interest payment date?
But why the price of NCD has fallen by around Rs. 30. I saw 1020 2-3 days back. Right now it is around 990
As per my knowledge, the interest payment date is 8th March for 2 year bonds. Record date is 3 days before the interest payment date. It is around 1 month left for interest payment date?
But why the price of NCD has fallen by around Rs. 30. I saw 1020 2-3 days back. Right now it is around 990
It has fallen because of the RBI warning yesterday.
It is trading at 1030 now and has maturity value of 1132.25. That's 10% return in 8 months. Unfortunately there are hardly any sellers at current rates.
What should we do? The return is very attractive. Only 19 month left for redemption. Should we buy? Or Is it risky?
The management of Manappuram have issued a clarification on the issue here and have called a board meeting on the 10'th of Feb on improving corporate governance and disclosures.
The yield is great,the company is doing very well currently,you may take a small exposure if you can hold until maturity.
The risk here is ,in case of any more adverse news flow,the liquidity may completely dry up making it impossible to exit.
The Muthoot NCD N2(12% Annual,13 Sept. 2013 Maturity) is trading marginally higher and seems attractive too.
The management of Manappuram have issued a clarification on the issue here and have called a board meeting on the 10'th of Feb on improving corporate governance and disclosures.
The yield is great,the company is doing very well currently,you may take a small exposure if you can hold until maturity.
The risk here is ,in case of any more adverse news flow,the liquidity may completely dry up making it impossible to exit.
The Muthoot NCD N2(12% Annual,13 Sept. 2013 Maturity) is trading marginally higher and seems attractive too.
The return with Muthoot is also good but the difference is considerable
Around Rs 14 difference in price. Interest rate is also 0.2% less. Interest is paid annually whereas Manappuram pays it semi annually. Maturity date of Manappuram is before Muthoot. Considering only 19th months left for maturity, this difference is more significant.
The return with Muthoot is also good but the difference is considerable
Around Rs 14 difference in price. Interest rate is also 0.2% less. Interest is paid annually whereas Manappuram pays it semi annually. Maturity date of Manappuram is before Muthoot. Considering only 19th months left for maturity, this difference is more significant.
Yes, you are correct,the difference in YTM is considerable.
The Reserve Bank doesn't seem very pleased with the rapacious growth in the gold loan segment, so both companies are vulnerable to any forthcoming regulatory action.
The Reserve Bank doesn't seem very pleased with the rapacious growth in the gold loan segment, so both companies are vulnerable to any forthcoming regulatory action.
I hope gold loans sector doesn't repeat the microfinance story.
Manappuram Finance NCD Issue - August 2011
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