Tuesday, August 04, 2009

Shriram Transport Finance NCD Issue

This is a good issue. At 11% yield, spread is quite high over bank fixed deposits (7%-7.5% today) or G-secs for the premier commercial vehicle finance company in India. These NCD's will be listed on NSE, so it is possible to exit them at any time - no need to hold them till maturity.

There are 5 kind of NCD's. Option III is effectively a zero coupon bond, which would have the max capital appreciation if yields were to compress. I have applied for this one. Issue is open till 15th August.

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