11.5% Shriram Transport Finance Secured NCD – July 2014

Shriram Transport Finance NCD-July-2014Shriram Transport Finance Secured NCD – July 2014

Shriram Transport Finance Secured NCD would open for subscription on 2nd July, 2014. Interest rates are up to 11.50%. Shriram Transport Finance offers this NCD where interest is payable every year, monthly and at maturity. Senior Citizens would get additional 0.25% interest rates. Can we invest in Shriram Transport Finance Secured NCD of July, 2014? Are there any change in its latest financials ?

About Shriram Transport Finance Ltd

Shriram Transport is part of Shriram Capital, which has significant presence in commercial vehicle financing business, consumer finance, life insurance, stock broking, chit funds etc.

Also Read: Invest in Top rated company FD Schemes to get superior returns

Shriram Transport Finance NCD July, 2014

Shriram Transport is issuing 36 months, 60 months and 84 months secured NCD’s. For Secured NCD the assets are backed up for principal and interest. In case something happens to the company and it gets closed, investors of NCD would still get their principal investment and interest. They would be given first preference compared to others.

Features of Shriram Transport Finance NCD July, 2014

  • Start date: 2-July-2014
  • End  date: 22-July-2014
  • NCD’s are available for 36 months, 60 months and 84 months tenure.
  • Interest payable monthly, annually or at maturity depending on the series of NCD.
  • Face value of the bond 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 in NSE and BSE. Hence, these are liquid investments.
  • NCD’s can be invested through Demat account or Physical form except for Series-IV and V (monthly interest option) which should be invested only in Demat form.
  • Non-Resident Indians (NRI’s) cannot invest in these NCD’s.
  • Senior Citizens would get 0.25% higher interest rate compared to others.
  • The issue size is Rs 1000 Crores with an option to retain Rs 1000 Crores aggregating to Rs 2,000 Crores.

Below is the Interest rate chart

Shriram Transport Finance NCD-July-2014-Interest Chart

Shriram Transport NCD – How the returns taxed?

  • If the NCD’s purchase through demat account, no TDS would be deducted by the company.
  • If the NCD’s are purchased in physical form, TDS would be deducted if interest exceeds Rs 5,000 as per tax guidelines.
  • Income tax on interest would be based on individual tax slab. Means, irrespective of whether company deducts TDS or not, you should show the interest income on your income tax return and pay necessary income tax.

How the company is doing in terms of Financials?

  • Revenues of the company have grown from Rs 6,563 Crores (FY 2012-13) to Rs 7,888 Crores (FY 2013-14).
  • Profits have declined from Rs 1,360 Crores (FY 2012-13) to Rs 1,264 Crores (FY 2012-13).
  • Non Performing Assets (NPA) of the company is 0.73% (FY2012-13) Vs 0.8% (FY 2013-14) indicating a marginal increase.

Why to invest?

  • Company revenues are growing.
  • Secured NCD protects your money. Means in case of anything happening to the company and it gets closed, investors of NCD would still get the principal and interest. Hence it is safe to invest in such secured NCD’s.
  • Attractive interest rates up to 11.5%.
  • These NCD’s are rated by rating agencies as CAREAA+, CRISILAA, INDAA+ which indicates the highest degree of safety.

Also Read: 3 Friends – Different saving habits – Who is best ?

Why not to invest?

  • Shriram Transport Finance profits have declined in 2013-14 compared to previous years. In future if profits further decline, interest payment could be delayed.
  • Finance companies are risky. Due to competition, in future, it may need to reduce interest rates charged to customers and this can lower the margins.

How to invest in Shriram Transport Finance NCD?

If you have demat account, you can login to your account and check NCD section and apply from there. In case you do not have demat account and want to apply through manual method, you can download Shriram Transport NCD application form and contact nearest collection centre to invest.

Conclusion: Shriram Transport Finance NCD’s of July, 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 some negative points, I feel you can invest in such investment options.

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Shriram Transport Finance Secured NCD – July 2014

Suresh KP


  1. Hi Suresh,

    I want to invest Rs 25k in Shriram Transport through online, please let me know after maturity company will transfer the maturity amt at my bank or I need to follow some manual process.

  2. Hi Suresh,

    I would like to invest 1,00,000/- per year on shiram Transport Finance NCD for 5 years.After 5 year how munch i will get, could you please suggest me where i can invest or not.

  3. Hi suresh, Is any bank offer long term fixed deposit, i,e. 15 years time span,  to commulate good amount on maturity. 

  4. hi suresh,  i m completely new to this investments, i m looking for a monthly income for my mom who is very old where i can invest 1lakh on her name, can u please suggest me this could be good option for me.

    1. Sunitha, since you might be investing her money, invest in Post office MIS scheme or bank FD scheme where you would get quarter interest. Other options are risky.

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