NCD Issue: Higher Rates for Shorter Durations

In recent news, InCred Financial Services has announced its latest Non-Convertible Debenture (NCD) issue, offering higher interest rates for shorter durations. This news has garnered attention from potential investors looking for new investment opportunities.

However, before investing in NCDs, it’s important to consider several key factors. One of the most crucial factors to keep in mind is the liquidity of NCDs compared to debt funds. In comparison, NCDs have lower liquidity, making it harder to sell them in the market in an emergency.

Another factor to consider is the current interest rate scenario. With rates still on the rise, better investment options may offer higher returns. Additionally, InCred Financial Services’ credit rating of below AA does not instil confidence in the company’s financial stability, making it a higher-risk investment option.

It’s also important to consider the tax implications of investing in NCDs. The interest earned from NCDs is taxed as income, and the amount of tax paid will depend on your tax bracket.

In terms of the NCD issue itself, the NCDs have a face value of Rs 1,000 each, with the base issue amounting to Rs 175 crore. There is also an option to retain an oversubscription of up to Rs 175 crore, aggregating to a total of Rs 350 crore.

While the higher interest rates offered by InCred Financial Services’ NCD issue may seem appealing, it’s important to consider the abovementioned factors before making any investment decisions. Before investing, it’s recommended to seek the advice of a financial advisor and thoroughly assess your investment portfolio to ensure the NCDs align with your financial goals and risk tolerance.