Shriram Transport Finance NCD 2011

| June 20, 2011 | 52 Comments

Shriram Transport Finance Company Limited is offering NCD (Non Convertible Debentures) with maximum interest rate of 11.60% to retail investors. The NCD has two options with tenure of 3 years and 5 years. The issue is open from 27 June 2011 to 09 July 2011. It is a public issue of NCDs aggregating upto  Rs. 50,000 lacs with an option to retain over-subscription upto Rs. 50,000 lacs for issuance of additional NCDs, aggregating to a total of up to Rs. 1,00,000 lacs. Following are the interest rate and other details of  Shriram Transport NCD:

Download Application Form

Check Allotment Status

Options I II
Frequency of Interest Payment Annual Annual
Minimum Application Rs. 10,000/- (10 NCDs) (for all options of NCDs, namely Options I and Option II either taken individually or collectively)
Face Value of NCDs (Rs./ NCD) Rs. 1,000 (1 NCD) Rs. 1,000 (1 NCD)
Mode of Interest Payment Through Various options Available Through Various options Available
Coupon (%) for NCD Holders in Category I and Category II 11.10% per annum 11.00% per annum
Coupon (%) for NCD holders in the Reserved Individual Portion 11.60% per annum 11.35% per annum
Coupon (%) for NCD holders in the Unreserved Individual Portion 11.35% per annum 11.10% per annum
Effective Yield (per annum) For NCD holders in the Reserved Individual Portion – 11.60%For NCD holders in theUnreserved Individual Portion –

11.35%

For all other NCD holders –

11.10%

 For NCD holders in the Reserved Individual Portion –11.35%For NCD holders in the

Unreserved Individual Portion

– 11.10%

For all other NCD holders
Put and call option Exercisable at the end of 48 months from the Deemed Date ofAllotment Nil
Tenor 60 Months* (5 Years) 36 Months (3 Years)
Redemption Amount (Rs./NCD) Repayment of the Face Value plus any interest that may haveaccrued at the Redemption Date,or at the date of early redemption

if any Put Option or Call Option

is exercised, as the case may be*

 Repayment of the Face Value plus any interest that may haveaccrued at the RedemptionDate.
*Subject to the exercise of the put and/or call option
Credit Rating of Shriram Transport NCD 2011
CRISIL ‘AA/Stable’ for an amount of upto Rs. 1,00,000 Lacs ‘AA/Stable’ for an amount of upto Rs. 1,00,000 Lacs
CARE ‘CARE AA+’ for an amount of upto Rs. 1,00,000 Lacs ‘CARE AA+’ for an amount of upto Rs. 1,00,000 Lacs

Notes:

  • Retail investors investing less than Rs. 5,00,000 (5 lacs) will come under ‘Retail Individual Portion’ and will get the maximum interest rate of 11.60% in option-1
  • NRIs cannot apply for this scheme
  • Demat account is necessary
  • If possible, invest under Rs. 5 lacs to get good interest rate.

Our Review of Shriram NCD 2011:

This NCD is offering very good interest rate. The shriram ncd of 2010 offered 11% interest rate and it is still trading at premium despite substantial increase in interest rates. So there are very high chances of listing gains. With the hypothetical investor’s expectation of 10.50% from such NCD, there can be listing gain of around 4%

Moreover, if interest rates go down next year, the price of NCD will rise substantially. So it is good to apply for this NCD

How to Invest in Shriram Transport NCD

  • Request for application form by filling form HERE or by emailing at fd@moneyvriksh.com
  • We will send you the application form
  • Send the application form along with documents to following address:
MONEYVRIKSH.COM
73, AMRAPALI APTTS.
PLOT NO-56, I.P. EXTENSION
DELHI-110092
NEAR BALCO MARKET
 

If you have any doubt/query, you may call 9818716151 or leave comment

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Category: Blog, Fixed Deposit

  • Mohan B

    It seems to be a good investment option. Thanks for informing.

  • Mohan B

    The date is not mentioned. When it is starting?

    • admin

      The date is mentioned in the first paragraph. It is staring from 27 June and will go o till 9th July 2011

  • vijay kokane

    Seems to be better at this stage but we have to shell out atleast 10% on tax. Senior citizens will get benefitted.

    • ICWA

      NO TDS APPLICABLE ON NCD. SO WHY 10% LOSS?

  • ICWA

    Is allotment on FIFO (first come first get) basis like last time?

    • admin

      Yes. Allotment is on first-come-first-serve basis.

  • bmm

    wot is the grey market premium ruling on shriram transport NCD kindly advice

    • admin

      Not confirmed but as per one website it is around 2.5-3%

  • V,Eswaran

    I don’t understand why these NCDs will command a premium?

    Some of the existing listed NCDs of STF are giving a higher yield at the prevailing market price than this new issue. For example (NCD 10.50% ANNUAL OPT III NSE code SRTRANSFIN Series NC) at todays mkt price of Rs 979 gives a yield of 11.76% if purchased at this price and held till maturity. This yield is calculated taking into account cost like brokerage of 0.5%. Similarly (NCD 11% HALF YEARLY OPT I NSE code SRTRANSFIN Series N1) at todays price of Rs 1005 gives an yield of 11.85%.

    When existing issues are available at higher yield why a new issue at lower coupon rate would command a premium?

    • admin

      Very True Mr. V Eswaran, but the fact that ignorance still exist in Indian market and retail investor runs towards new issues w/o considering existing issues’ yield, may be a reason that such issue may provide listing gains.
      Please share your knowledge in our investment discussion forum

    • Harsh More

      Well Mr. V its not about ignorance…. ur analysis might be right …but i suggest that first u shd try to buy the existing NCDs and lemme knw how many u managed to buy….thn u will understand y new NCDs command premium… its a myth that NCDs can be bought in market…eben if u do manage to buy u wont gt much..

      • Harsh More

        plz ingnore my previous comment as the same has already been dicussed…. however i have a query if u may plz reply… if intrest is paid half yearly (1/0ct/11) and i buy an existing NCD on 1/jul/11 then i will get interest for 6 months or only 4 months

  • Prakash

    Technically you are right, but a person wanting to invest say Rs. 500,000 cannot buy from the market since the tradeable qty yesterday was only 85. SO it is not practical.

    • admin

      Valid point but it is not a reason for premium listing.

  • Prakash

    sorry. it was 220 (not 85). still much less than required. Also, I would like to know how to calculate Yield. You said it would be 11.85%. Today the rate is around 1007-1010. So how does one calculate yield ?

    • admin
    • V.Eswaran

      Prakash,

      You are right. These NCDs are thinly traded. So you cannot buy it in one shot. It is not a good idea to buy it in one lot. One can watch the trend and keep buying it at favorable yields.

      How to calculate the yield? As suggested by admin one can use the yield calculator. The negative is one can’t be very sure what it is doing and yield given by it is correct or not. Calculating the yield is fairly simple and method I use is as follows.

      For example today’s closing price for series N1 is 1011. Suppose if you have bought it at this price the yield will be 11.62%. To calculate the yield you should put the entire cash flow in an excel sheet as follows. This series the coupon rate is 11% half yearly and pays intr on 1st Oct and 1st Apr of each year. Maturity is on 27/8/14. Negative figures below show cash outflow and positive figure show inflow.

      Date CashFlow Remarks
      24/6/11 -1016.86 Purchase price 1011 + brkrage 5.86
      1/10/11 55.00 Half yearly intr. received
      1/4/12 55.00
      1/10/12 55.00
      1/4/13 55.00
      1/10/13 55.00
      1/4/14 55.00
      27/8/14 1044.60 Maturity proceeds + intr for the broken period at end
      You can calculate rate of return ie yield using the worksheet function XIRR on the above cash flow which gives an yield of 11.62%

      • Shyam

        Hello Mr. Easwaran,

        Can u pl give ur email and wd like to communicate wth u.
        thnx.

        • V.Eswaran

          Shyam,

          It is quite possible others might have the same doubts/queries that you have. And an open discussion will benefit everyone. So it is better you raise them in the public forum rather than thru personnel mail.

          Thanks

          • Shyam

            Hello Eswaran,

            Thanks and fine with me.

            1) Wanted to know where I can track the real-time prices of retail or wholesale debt instruments like NCDs and bonds etc. on NSE.

            2)Where can I get the liquidity/ history of trading of these instruments.

            Appreciate your response.

            Regards

            Shyam

  • Prakash

    Thanks for the response and the link. I tried out the link but it seems it does not give me correct YTM. e.g. If I buy it at say 1200 and 3 yrs are remaining. Coupon rate is 11.03% and quarterly payout, then the YTM should come to around 12% whereas in the calculator on the link, it shows lower YTM in semi-annual than annual and even further lower in Quarterly payouts of interest.

  • vijay kokane

    Dear Prakash,
    you are right. YTM annually will be higher than half yearly.
    That means annual return on investment would be around two times the half yearly.

  • Prakash

    I hear that some more attractive yield bonds are in the pipeline. Any idea about the company and yields and time ?

  • V.Eswaran

    Shyam,

    You can get the daily closing prices, days high/low traded volume etc details from NSE website (nse-india dot com) using the following path.
    Home > Equities > Market Information > Market Today

    You need to download the bhavcopy(pr.zip). This is an archive having large number of files in which the file pdDDMMYY.csv will have the above details on all traded securities and debt instruments. The debt instruments will be available towards the end of this file after EQ series under the caption “Other Series”

    You can get the historical data from the menu option with the same name from the above web page.

    To get live quotes you can use the Quote option from NSE site or more typically from the online trading site one uses for buying/selling shares. I use HDFC Securities which supports trading in these instruments. Other sites may or may not support these instruments ex: Kotak securities does not support these instruments.

    Regards

  • http://rediffmail.com Dinesh Shrimal

    I want to know that can we apply multiple application under single name , same demat a/c up to Rs 5 Lac which is highest amount for resident individual ? Is there any problem to apply under additional applications ?

    • admin

      There should not be any problem as far as the cumulative amount is less than 5 lacs

  • P.N sahu

    whether Demat account is compulsory for subscribing shriram transport finance 2011 NCDs

    • admin

      Yes. Demat A/C is compulsary for investment in NCDs as they are tradable on stock exchange

  • Dinesh Dudeja

    Pl let me know the company office in delhi who so ever authorized to deposit the application for Shriram NCD.

  • admin

    The scheme has been oversubscribed and closed on 29-July-2011. So, please do not deposit applications now.

  • Prakash

    Now that it is over subscribed, what will be the basis of allotment ?

  • Shivv

    FCFS- First Come First served

  • San

    Any update on allotments?
    When we will get the allotment details?

    • admin

      Allotment Details will be updated on the post above as soon as it’ll come. Patience is virtue!

      • San

        Thanks for quick reply!
        Another NCD from Muthoot Finance is going to come this month end.
        Are review link for the same?

        • Harsh More

          I have applied for this NCD and awaiting allotment… however can some1 plz tell whether the interest will be cumulative or simplw…. I means for the seocnd year interest will be Rd.111.6 (1000*11.6%) or will it be Rs.129.4 (1000+111.6)*11.6%. Also what will be the interest date and Code for the NCD for trading

          • Harsh More

            Also if i buy one lot of Rs.1000 of existing NCD from market than wat is the brokerage and taxes that i will have to pay.. if the current price is Rs.1010 then what will be my effective purchase price after adding brokerage and taxes… will the same amount of brokerage and taxes be applicable at the time of selling as well.

            On the other hand if u but NCD from the company itself ..then does the brokerage and taxes still apply… if yes then wat is the difference between buying from market and buying from company

          • admin

            @Harsh More
            The brokerage depends on your broker. Considering o.30% delivery brokerage, it will cost you approx. Rs. 5 per NCD for both purchase and sell. Even if you buy directly from company, you will have to incur brokerage while selling. So, in effect, it will make difference of Rs. 5.00 only

          • admin

            @Harsh More
            In case of cumulative, you will not get any interest payment
            In case of annual interest bond, you’ll get 111.6 in 2nd year

  • Manish

    guys, just checked my dp account and I got some allotment but its not full allotment what I applied so not surehow they are allotment is going? I thought its first come first serve but look they are also doing some prorate as well..?

    • admin

      Applications made on last day will not be alloted full ncds

      • Harsh More

        well i applied on 27th at 10am.. still nothing alloted so far

  • Prakash

    I too got allotment yesterday. Allotted number of bonds is 27.7% of the applied number of bonds.

  • admin

    We got mail from the registrar (IEP) that it’ll take 2 days for them to release online allotment status.

    • Harsh More

      i use icicidirect…how will i knw if i get allotment???

      • admin

        @Harsh More,
        You would have got application number. You can use that to check status. Moreover, you must be already having your Demat A/C number. So, you should not face any problem!

  • admin

    Everyone,
    Please check this –
    http://www.facebook.com/media/set/?set=a.194681830585700.64061.114353405285210

    You’ll get to know how allotment is done

    • Harsh More

      well i do have application number and abount 70% of the money has been refunded as per the allotment…but the problem is that i cant see the NCD in my portfolio and thus cant sell it

  • Nirmal

    where can I get record dates for payment of interest for ncd’s.?

  • Dhawannaveen

    i am holding 55 ncd of shriram transport finance option 1 of 11.60% are these listed on nse & if listed what is its no between  n1 to n6  as i am confused which is my bonds pl help by intimatinh me
    thanks naveen dhawan email address dhawannaveen @yahoo .com

    • http://moneyvriksh.com/ MoneyVriksh.com

      The NCD must be in your DEMAT account. check the ISIN number and confirm it with the series by checking it on http://www.nseindia.com. For your reference, check the screenshot

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