11.75% Shriram City Union Finance Secured NCD April-2014-Good to invest

Shriram City Union Finance Secured NCD-Mar-Apr-2014Shriram City Union Finance Secured NCD April-2014-Good to invest

Earlier in Nov-2013, Shriram City Union Finance has come up with secured NCD’s offering 11.50% interest rates. Currently Shriram City Union Finance is again coming up with Secured Redeemable Non Convertible Debentures (NCD’s) which would open for subscription on 16th “April, 2014. It comes with 1 year, 3 year and 5 year option. The interest rates are as high as 11.75% per annum. In this article, I would detail about whether we can invest in Shriram City Union Finance NCD, its features and the risks involved in this NCD.

Shriram Citi Union finance secured NCD of March/Apr-2014

Shriram City Union Finance is issuing 24 months, 36 months and 60 months NCD’s. For secured NCD the assets are backed up for principal and interest. In the case windup of company, investors of NCD would still get their principal investment and interest. These are covered in the form of immovable properties and receivables.

Also Read: Post office Saving Schemes are safest investment options.

Features of Shriram Citi Union finance secured NCD of April, 2014

  • Start date: 16-April-2014
  • End date 16-May-2014
  • NCD’s are available for 24 months, 36 months and 60 month period.
  • Series I, II and III indicate that Interest is payable annually and Series IV, V and VI pays the interest at maturity.
  • Bond face value is Rs 1,000.
  • Minimum investment is for 10 bonds means, you need to invest for a minimum of Rs 10,000. Beyond this you can invest in multiples of 1 bond.
  • These NCD bonds would be listed on BSE, hence these are liquid investments.
  • NCD’s can be invested through Demat account or Physical form.
  • Non-Resident Indians (NRI’s) can invest in these NCD’s.
  • The issue size is Rs 200 Crores.

Below is the Interest rate chart.

Shriram City Union Finance NCD-Mar-Apr-2014

How the company is doing in terms of Financials?

  • Below are the details profit after tax
  1. Year ended Mar-2009 – Rs 117 Crores
  2. Year ended Mar-2010 – Rs 194 Crores
  3. Year ended Mar-2011 – Rs 240 Crores
  4. Year ended Mar-2012 – Rs 342 Crores
  5. Year ended Mar-2013 – Rs 449 Crores
  6. First half  of this financial year 2013-14 – Rs 244 Crores
  • Non Performing Assets (NPA) of the company is 2.19% (FY2012-13) Vs 2.43% ended Sep-2013.

Why to invest?

  • Company is earning good profits, hence less risk for payment of interest on these NCD’s.
  • These NCD’s are secured. Means in case of any unforeseen thing happening to company, investors of NCD would still get the principal. Hence it is safe to invest in such secured NCD’s up to this limit.
  • Attractive interest rates of 11.00% for 24 months, 11.50% for 36 months and 11.75% for 60 months NCD.
  • CARE rated these NCD’s as “CARE-AA”

Also Read: Secure your life by investing in income producing assets

Why not to invest?

  • Companies into finance business are little risky. Means the profits indicated now can reduce in future due to increase in interest rate payments. Due to competition, in future, it may need to reduce interest rates charged to customers and this can lower the margins.
  • In case of non performance of the company, there could be delay in interest payment and repayment of principal investment.

You can download the prospectus of Shriram City Union Finance NCD-April, 2014 from SEBI Website at this link

Conclusion: Shriram City union Finance NCD’s of April-2014 are secured. You can safely invest in such safe investment options and get high returns. Since these are traded on stock exchanges, these are liquid investments too. Though there are a few drawbacks, due to safety in nature, I feel you can invest in such safe investment options.

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Shriram Citi Union finance secured NCD of April, 2014

Article by Suresh

Suresh KP i.e. me have written 500+ articles on this blog. I love doing analysis and identifying the Best investment options.


  1. nagaraj parasiva says:

    very informative

  2. n. k. jain says:

    how to calculate income tax on income from investment in shriram-city-union-finance-secured-ncd-april-2014 ?

    • Suresh KP says:

      Hi Jain, Whether it is NCD or company fixed deposit, any interest received either annually or cumulatively the interest should be shown in your annual taxable and pay income tax based on your income tax slab.

  3. Prakash says:

    Dear sir,

    How to buy these NCD's??

    If these are listed in stock exchanges, will the options mentioned above be avaialble and selection of these options during purchase also available??

    • Suresh KP says:

      Prakash, If you have demat account, login and you should be able to see these NCD’s now in “NCD” option. In case you want to buy at later point of time, you can go this option itself and click on “Listed securities” (terminology may differ) and click on “buy” option. You may not get at same rate after listing. It may available at lower price or higher price.

  4. biswambhar says:

    Do existing Ncd holder gets a higher rate of interest.in ither Wordswords those who donor hold Ncd of scuf they get a lower interest than 11.75 for 60 mont

    • Suresh KP says:

      Biswambhar, No. These are like seperate lots and hence carry the interest rates which are indicated in NCD. If you have applied earlier and now they are offering new NCD’s which carry high interest rate, your old NCD’s, you would still get low rate only.

  5. Vk Sivaraman says:

    Hi Suresh,


    Thanks for the insights. Even if the company is closed will I get my Principle alone or the intrest too? Also who is responsible to pay the amount to investors if the company announces banckrupcy. This is not for this NCD issue. Genrally I have a clarification. Also if I subscribe for three years getting annula intrest for 11.5% and if I plan to withdraw at the end of Second year, can I withdraw without any loss in my principal for premature withdrawal

    • Suresh KP says:

      Hi Sivaraman, If company goes banckrupcy, all the assets would be taken over by the SPOC appointed by company (I am not sure whether SPOC or registrar). Now such entity would pay money in the order of preference like debenture holders, secured outstandings (like NCD etc.), outstanding creditors and then balance if any would be paid back to share holders. Here the principal amount only is secured, not interest.

  6. Vikas Thorave says:

    Hello Suresh Sir,
    I want to ask you, Investment in NCD’s is tax saving under 80 c?

  7. dr.p.suhakar says:

    Are returns taxable? If nris invest is the money repatriable(interest and principle)?

    • Suresh KP says:

      Dr. Sudhakar, Returns would be taxable based on individual tax slab. Individual tax payers need to declare the same in ITR and pay tax and file ITR. No, NRI’s cannot invest the money on repatriation basis. This guideline is there for all company fixed deposits and NCD’s unless specifically exempted.

  8. vignesh says:

    is there a possibility that we can get lower interest in ncd maturity, if the perfomance of the company is not well?

    • Suresh KP says:

      No vignesh. Returns are fixed. The only risk is delay in payment of interest or principal. Since these are secured, even in case of non performance, you would get money, but there could be delay.

  9. Suresh says:

    Hi Suresh 

    Thanks for giving us the insights on all these articles. I usually check your article before I plan for any investment. This one looks good as you mentioned. 

    One question though, the markets are on a high these days. It is said the correction will come around when the election results are announced. Should we plan for something during this period. 





    • Suresh KP says:

      Hi Suresh, What would you think, if I tell you to invest in Gold ETF’s now ? Are you surprised ? While markets may reach new highs after elections too, soon they should reach even bottom, this is where Gold prices would jump. If my understanding is right, we should make 15% to 20% returns in gold investments in coming 3 to 6 months. 

    • Sandeep Kumar says:

      Yes sir

      please do an article on current market situation and how retail investors can make money. 

      Which stocks to go for and how to make a safe portfolio.

      thanks for the good work. 

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