How to Double Your Money

Elite Wealth Advisors Ltd.

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Features of SREI NCD

NCDs have Tenure of 3 Years, 5 Years, and 6 Year 3 months.

Annualized Return up to 11.75% per annum.

Credit Rating of “CARE AA-” by CARE & “BWR AA” by Brickwork indicating high degree of safety regarding timely servicing of financial obligations.

Double Your Investment in 6 Years and 3 Months.

Options to hold NCDs in physical as well as in Demat Form.

The NCDs are proposed to be listed on Bombay Stock Exchange.

Understanding Debentures

Whenever a company wants to raise money from the public or institutions, it issues a debt paper for a specified tenure where it pays a fixed interest on the investment. This paper is known as a debenture. Some of the debentures are termed as convertible debentures since they can be converted into equity shares on maturity. A Non - Convertible debenture or NCD does not have the option of conversion into shares and on maturity the principal amount along with accumulated interest is paid to the holder of the instrument.

Advantages of Investing in NCDBetter Returns: NCDs in the past have offered

interest rates which were quite attractive as compared

to interest on other fixed-income options.NCDs in the past have offered interest rates which were quite attractive as compared to interest on other fixed-income options.

No Tax deduction at source: There is no tax deduction at source (TDS) on NCDs offered in DEMAT mode and listed on a stock exchange as per section 193 of the IT Act.

Advantages of Investing in NCD Higher Safety: NCD issues by NBFCs are secured debt, which means they are completely secured by assets of the company. NCDs are also rated by credit rating agencies, which indicates the degree of safety regarding timely servicing of financial obligations.

Good Liquidity: NCDs offer good liquidity due to Stock Exchange listing.

Availability of various options: Applicants can apply in various options having different maturity periods as per their requirement.

Differences between NCD and Fixed DepositsFollowing are the differences between a NCD and a fixed deposit

Safety: While NCDs are secured debt, corporate FDs are altogether unsecured and bank FDs are secured to the extent of Rs one lakh only.

Taxation: There is difference in taxation aspect also. In addition to interest income, there can be capital gains if you sell the NCD before maturity. However, unlike FDs, there is no TDS in case of NCDs.

Interest rate risk: Unlike FDs, NCDs carry interest rate risk due to changes in market interest rates.

Conclusion

So we can say that for investors looking to park their money for long period, NCD is a good mode of investment tool.

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