Top Rated NCD’s to buy from Secondary Market now
There are some requests from readers to recommend top rated NCD, which can be purchased from secondary market (BSE/NSE) to get high returns. I have analyzed NCD’s which are trading in BSE/NSE at cheaper price now and short listed these top rated NCD bonds to invest. These NCD’s would provide good returns and annualised yield is as high as 15.3%, if you hold them till maturity. What are these top rated Non Convertible Debentures (NCD) bonds, which you can buy from secondary market now to get such superior returns?
Also Read: What are the top rated company Fixed Deposit Schemes to invest in India?
How I short listed these top rated NCD for investment?
My analysis contains the following parameters:
- I have considered NCD’s which are currently trading in BSE/NSE and their last trading price (LTP). Generally, these have a face value of Rs 1,000 per bond, however, depending on coupon pay out date and demand/supply to buy/sell in the open market, the bond rate fluctuates.
- Yield to maturity (YTM) of an NCD is the internal rate of return earned by an investor who purchases the NCD bonds today, at the market price, assuming that the bond will be held until maturity, and that all coupons and principal payments will be made on schedule.
E.g. if an NCD, which has a face value of Rs 1,000 is trading at Rs 1,030 which has 12% coupon rate and coupon payout date is on 28-Feb-15, you would get Rs 120 as interest in next 3 months. Ideally the bond should have traded with a face value + 9 months interest, i.e. Rs 1,000 + Interest of Rs 90 (Rs 1,000 x 12% x 9/12). However, it is trading at Rs 1,030. Means you are benefitting Rs 60 per bond. This Rs 60 per bond would work to 6% on face value (Rs 1,000 / 60 x 100). If you need to hold this bond for next 2 years till maturity, you are going to get 3% per year additionally apart from coupon rate of 12%. Means you would be getting 15% per annum interest for next 2 years. This is what I call as, smart way of investing in NCD’s from secondary market.
- One precaution should be taken while analyzing such bonds is that during the coupon payment period for the NCD i.e. period from record date till coupon payment date, YTM may not provide correct view as it may include coupon (interest) to be received on the coupon payment date which is not receivable if an investor buys a security during the said period. Typically NCDs Bonds have Ex-date 15 working days before the coupon payout date. Hence, any coupon date falling for next 15-30 days should be avoided, instead of getting confused and investing in wrong investment. I have anyway removed such NCD’s from my analysis.
5 Top Rated NCD’s to buy from Secondary Market now
Top 1: Manappuram Finance Limited – NCD Series: MANAPPURAM FIN S6 12.5 05AP17
- This is ICRA A+ rated NCD
- Coupon rate is 12.5% per annum
- Face value of the NCD bond is Rs 1,000 per bond
- Currently these NCD bonds are available in the secondary market at Rs 1,025 with coupon payout date of 5th April. Means if you invest from now to 5th April, 2015, you would get 12.5% interest on Rs 1,000 bond price i.e. Rs 125 per bond.
- Maturity of the NCD is 5-Apr-2017.
- Yield to Maturity works out to be 15.33% per annum if you are holding till maturity.
Top 2: Shriram City Union Finance Limited – NCD Series: SHRIRAM CITY S1 10.5 3MY16 1K
- This is CARE AA rated NCD
- Coupon rate is 10.5% per annum
- Face value of the NCD bond is Rs 1,000 per bond
- Currently these NCD bonds are available in the secondary market at Rs 1,001 with coupon payout date of 3rd May. Means if you invest from today to 3rd May, 2015, you would get 10.5% interest on Rs 1,000 bond price i.e. Rs 105 per bond.
- Maturity of the NCD is 3-May-2016
- Yield to Maturity works out to be 15.12% per annum if you are holding till maturity.
Top 3: Manappuram Finance Limited – NCD Series: MANAPPURAM FIN S3 12 05AP16
- This is ICRA A+ rated NCD
- Coupon rate is 12.0% per annum
- Face value of the NCD bond is Rs 1,000 per bond
- Currently these NCD bonds are available in the secondary market at Rs 1,040 with coupon payout date of 5th April. Means if you invest from now to 5th April, 2015, you would get 12.0% interest on Rs 1,000 bond price i.e. Rs 120 per bond.
- Maturity of the NCD is 5-Apr-2016.
- Yield to Maturity works out to be 15.0% per annum if you are holding till maturity.
Top 4: Shriram Transport Finance Company Limited – NCD Series: SHRIRAM TRANS OP1 9.75% 01JU15
- This is CARE AA+ rated NCD
- Coupon rate is 9.75% per annum
- Face value of the NCD bond is Rs 1,000 per bond
- Currently these NCD bonds are available in the secondary market at Rs 1,045 with coupon payout date of 1st April. Means if you invest from now to 1st April, 2015, you would get 9.75% interest on Rs 1,000 bond price i.e. Rs 97.5 per bond.
- Maturity of the NCD is 1-Jun-2015.
- Yield to Maturity works out to be 13.59% per annum if you are holding till maturity.
Top 5: Shriram City Union Finance Limited – NCD Series: SHRIRAM CITY SR1 10.6% 06OT15
- This is CARE AA rated NCD
- Coupon rate is 10.6% per annum
- Face value of the NCD bond is Rs 1,000 per bond
- Currently these NCD bonds are available in the secondary market at Rs 1,051 with coupon payout date of 3rd May. Means if you invest from now to 1st April, 2015, you would get 10.6% interest on Rs 1,000 bond price i.e. Rs 106 per bond.
- Maturity of the NCD is 6-Oct-2015
- Yield to Maturity works out to be 12.88% per annum if you are holding till maturity.
Consolidated Top Rated NCD Bonds available in secondary market is indicated below
Also Read: PNB Housing Finance FD Scheme offers 15% Interest – Can we invest in this?
What are the risks involved if you buy them from secondary market?
While you purchase them from secondary market, you need to keep few things in mind.
- Don't think that you can sell these bonds anytime and come out before maturity. If you want to sell them before maturity, you may need to sell them at lower price as there might not be any demand.
- Though these are top rated bonds, in case of any under performance of the company in future, it can delay the interest payment and re-payment of investment amount itself.
Conclusion: Investing in company NCD Bonds would contain some risk. If you are high risk takers and looking for good returns, you can invest in these high rated NCD’s.
Readers, I would love you hear from you about this analysis. Do you see any risks in this analysis ?
If you enjoyed this article, share it with your friends and colleagues on Facebook and Twitter.
Suresh
Top Rated NCD’s to Buy from Secondary Market now
- NFO Alert – Groww MF Launches India’s First Nifty India Railways PSU Index Fund - January 15, 2025
- Interested in flexible investment strategies? Try Flexi Cap funds - January 14, 2025
- How to Create a Rs 10 Crore Wealth with Rs 25,000 Mutual Fund SIP’s? - January 13, 2025
THESE INFORMATION IS TOO MUCH GOOD FOR MAKING TRADING OF CONVERTIBLE-NON-COVERTIBLE BONDS-DEBENTURES
best bid is POST OFFICE. Though little less interest but otherwise sound sleep friend.
I am interesting in good companies ncd from secondry market . Will you please suggest.
Hello Mam, You should always look for AAA rated NCDs to invest. There are plenty of them that are being traded and the prices would change every minute. Here is the link where you can check for “Regular” NCD bonds which has all bonds trading at current prices. You can look for AAA rated bonds. Also check for interest rates + maturity dates before investing. https://www.nseindia.com/market-data/bonds-traded-in-capital-market
Hi Suresh,
I purchased the TCFSL INE306N07LK9 on 11Aug22 & it’s interest payment date is 26-Aug-2022. I didn’t received interest till now. Is there any specific rule on holding period to receive interest? If not, to whom i need to inform ?
Thanks & Regards
Ramesh
Ramesh, Pls check with their customer support. Generally they make payment once month is completed with a cut off date. Since you purchased 14 days before the due date, they might process with next interest cycle. But better get clarity from them
This is almost 5 Yrs old Article. Please update the same with present day NCDs (minimum 10 Top Rated in nos.) with keeping Risk Factors of Credit Default such as IL & FS, DHFL scenarios etc and Pedigree of NCD Issuing Companies in mind.
Are all high rated NCDs sold lower than fixed price?
Suppose i have 10 NCD @1000 FV ( Date of Issue 01.01.2010) with 10% ROI for 10 Years cumulative Option.
Now present market price ( on 01.01.2018) in NSE is 2000 ( Per NCD)
Now if i sell @2000 then i what amount i will get?
Is it the sum of Rs.2000+ Interest accumulated in 8 Yrs or Only Rs. 2000.
Plz comment.
I don’t know
how invest pnb housing finance
Thank you for a very useful article. Unfortunately, it seems there are limited facilities available from brokerages when it comes to buying an NCD from the secondary market. For example, if I want to purchase Muthoot finance, I can unable to search for the NCD after putting in the symbol MUTHOOTFIN in a prominent brokerages website. Of the big ones, only ICICI direct seems to provide a separate page for purchasing NCD. Even their, the YTM calculation are incorrect. I checked them by using the rate function in Microsoft Excel. After talking to my friends, I have looked at the following brokerages and none of them provide the yield to maturity information. Reliance, Kotak securities and Religare securities . NSE website also does not provide yield to maturity information. Same is the case of BSE.
Can you please suggest if there is a way to find the yield to maturity as well as the list of NCD that are being sold on any given day? Since it is a thinly traded market, I have to consistently look for NCD where there is a Seller, then immediately compute the YTM using Microsoft Excel and then again go and compare it with other NCD where there is a Seller.
Any place other website that provides this information and helps of retail traders to purchase and sell NCD is useful.
Thank you
hi ramana you can get edewils brokerage
upcomming ncd
I intend to buy NCDS WHICH CAN fatch me higher interest.than bank FD,and sefer, maturing within one year.. Thanks.
I intend to buy NCDS WHICH CAN THATCH me higher interest.than bank FD,and sefer, maturing within one year.
Hello sir,
I want to purchase a 2lk ncds per yr which is the best and tell rate me the time duration of bonds and anually intrest on it
With regard
GS .sachar
I WANT TO PURCHASE NCD UP TO RS 10LAC PL SUGGEST ME
Dear Sir,
1.Kindly advise me
(a) The best NCDs in terms of interest AND SAFETY OF CAPITAL IN THREE YEAR TIME ZONE.
(b) The bestMunicipal Bonds in terms of interest and safety of capital in three year time zone.
Purchased Bonds from the secondary market, after the maturity date arrives Will the total amount be credited to my bank account linked with demat?
Thats correct DP
Sir,
I want to invest in IIFL series Viii bond with a monthly payout of interest @12% p.a. Now I want to know that, whether the Rate of Interest or Yield would be the determining factor? What should be the determining factor if I want to sell off the bond before maturity?
Dear Sir
On or beofre 10th July 2016 I want to invest some amount thru secondly market in some best rated secured NCD , which are maturing in between 1 to 3 years from now . I have demat account . Pl suggest with details of the those NCD such as date of issue , face value + accumulated interest as on 10th July 2016
How to procedure purchase of secondary market ncd.now I want .
sir;can u suggest top ncds maturing after two years
Sparkling idea!!
Can you share the NCDs as of 2016.
I would like to know rated NCDs in market currently
I am interested in good NCD. May 2016 is the time I will have cash.
May-2016 is hardly we have 1 month. You cannot invest for such short term in NCD’s. you can invest in bank FD
HOW DO I SELL NCDs IN THE SECONDARY MARKET?
Hi Suresh this was a very interesting article, read it too late. Is there some way I can contact you I am interested in some good bonds for long term from secondary market, would appreciate if you could reply back
Please send the let’s company NCD & Fixed deposit list
Bhushan, list is already there in article
Which are good yielding investments long term
Dear Suresh,
Please know if it the right time to invest on Manapuram NCD which you’ve recommended here.
Thanks,
Binish
Yes you can invest
Dear Suresh, Pl. provide BSE Code No. of these Bonds or NCDs in order to place bids on BSE. INFORMATION provided above is very useful for investors.Thanx
– Ashok Dhanda
Hello Mr. Suresh, is ncd more secured than FD.
Yes Narendra. The sequence would be like this from security point of view high to low 1) Secured NCD 2) Un-secured NCD 3) Fixed Deposits
Dear Suresh,
thank you for your NCD ideas. How do I buy them? I have a demat account and a trading account in ICICI direct.
Go to IPO/NCD section and select the NCD which you want to invest and place order
is there any source of information for default of payment of interest/capital of such NCD?
No Bharat, it is only through reviews on vrious websites
thank you for information. however logically i think, as they are listed on exchange, exchange should be in know about such matters , and they must be suitabley brought to notice of investors.
wouldn’t tax free bonds be better compared to ncd as it is tax free?
Yes, however the returns are less.
NCDs are high risk instruments. It can not be sold in dull market . for buying and selling too very difficult. Moreover , these NCD issuing companies default in making payment . Addresses are being changed by buyer and issuing company in odd situations and loss is sustained by the person invested hard money.
Deepak fertilizer , Ceat tyre, Nagarjuna fertilizers and so many companies defaulted. Old man can not run door to door and legal actions in india are not the reamdy for investor .
I don’t suggest to even my enemy to invest in private placements, NCDs, company fixed deposits etc. It you loose 20-25 % i.e. the return is same as a Fixed deposits. so why take tensions.
M planning to invest in muthoot finannce ncd in secondary market so plz suggest me d good series to invest with d rate of interest plz
M not understanding this….can u plz explain in detail plz
Will these NCD’s be taxed on maturity, please
You need to declare this as annual income of interest and pay income tax on this
Yield to maturity not giving a clear picture & NCD’s having 15 working days ex-date before the coupon payout date is not clear to me.pls simplify?
Thanks for the nice tips. Article and analysis is pretty good.
But Manappuram business is not performing well. I see big risk in investing in these bonds.
Nagesh, All gold finance companies, this risk is there. It is manappuram, muthoot finance etc., I agree. Like I said these are high risk NCD’s, but top rated
Dear Suresh,
Thanks for this informations, I had a query with you regarding the same matter.
I having one more doubt for clarification that if the LTP of one NCD is less than the Face value, if I purchase it from the secondary market,
will the interest be of the face value?,
is it wise to invest those NCD by taking the risk?
is monthly interest payment option available in this case?
Regards,
Saju
Saju, Interest would be on face value only. If you want higher interest, you can consider them by taking risk. You check the NCD option, some of them offers monthly interest, but not sure whether any of these 5 would offer monthly interest.
Hi Suresh,
I am a regular follower of your blog & find your articles researched & resourcful. Good work & all the best for continuing the same momentum.
I appreciate your present article to point out probable NCDs available in market. I have a request here, if you can also plan to include similar analysis for Tax Free Bonds ( issued in last 2 years ) to provide an insight into the buying opportunities currently present considering YTM & other factors.
Thanks.
Nilesh
Sure, it is on the way and would be posted in next 1-2 weeks
Hi Suresh
Very interesting post.
Do we need demat acnt to purchase these Ncd? Or a simple trading account is sufficient?
Since these are available in stock market secondary market, you need to have demat account
Hi Suresh,
In the article, u have mentioned only NCDs with periodic payments. What about cumulative ones? For a young person not interested in periodic payouts, these would not be of much use.
Is it that the cumulative versions of these bonds also offer a good option?
Can u publish a similar article for Cumulative options as well?
Got it. Let me review in coming weeks.
Thanks for sharing the article Suresh.
Is all the NCD’s are Secured? For example if IO start investing in Shriram Transport Finance Company LTD from now you mean to say will get maturity value 13.6% on June 2015. Am I correct. Should that be one time investment or monthly SIP kind of thing? Please clarify.
You are correct. All are not Secured. You can check the bond status while investing through online, it would provide the secured/unsecured status.
Dear Suresh sir, Excellent review. I have been following your reviews and found them very informative. Looking forward for review on Tax free bonds as well.
Thanks
Hi Suresh,
I am regular reader of this portal. Thank you for secondary market NCD’ details.
Nice.
Kindly also let us know which ones are Secured NCDs.
It is really difficult to find the Trading Symbol & other details of the Bonds at NSE/BSE, if you could include that as well it would be of great help.
Thanks,
Looks I missed to include it. When you apply, in your login, you can check such status.