Feb 12, 2009

Tata CapitaL NCD

Tata Capital's NCD Issue A very Good Oppurtunity for long term investors to Invest in a safe heaven at the times when markets are going through a very volatile time.

Tata Capital's first Rs 500 crore non convertible debenture issue. With an attractive interest rate of 12% and a very stable rating is a good signal in rather crises situation.

Funds Will be used to finance its lending and investments, repay debt and pay for expenses. Tata Capital has a capital base of Rs 2100 crore wants to increase its existing Rs 8,000 crore book which it has built over the last 16 months.

Though the cumulative scheme is a lock-in scheme, investors have a put option at the end of 36 months to redeem their investments, without any interest rate penalty.

The NCDs are also proposed to be listed and traded on the NSE and investors may have the option of cashing out earlier, if the bonds witness frequent trading in sufficient volumes. Tax deduction on the NCDs will be on the interest paid and based on the income slab investor is in.

TCL intends 100 per cent allotment for investors who put in less than Rs 1 lakh. Even if the issue gets oversubscribed, preference will be given to the retail investors over other non-institutional investors (HNIs), institutions and QIPs.

The offer is rated LAA+ by ICRA, which is among the higher investment grade ratings.

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