India Infoline Non-Convertible Debentures (NCD)

A company for its extension and development may require raising funds without increasing its share capital. Debenture is such an instrument in writing given by the company acknowledging the liability for the total amount raised from the public and thereby agreeing to pay the money after expiry at a certain rate of interest per annum. There are various types of debentures but from conversion point of view we have;

(1) Convertible Debentures: Convertible Debentures gives an option to debenture holders to convert them into equity or preference shares at a stated rate of exchange after a certain period.

(2) Non-Convertible Debentures: They are not convertible into equity or preference shares afterwards. The holders of Non-Convertible Debentures enjoy higher rate of interest as compared to Convertible Debentures. During maturity/redemption the company get back its debenture and the debenture holder gets initial amount back along with the interest earned.

India Infoline Limited (IIFL) through its NBFC subsidiary, India Infoline Investment Services Limited

(IIISL) is coming up with Non-Convertible Debentures with a intention of raising Rs. 750 crores . The face value of NCD is Rs. 1000, minimum application is of Rs.5000 and an yield of up to 11.9% annually on redemption. The issue starts on 04-08-2011 and closes on 12-08-2011. Axis Bank Limited, JM Financial Consultants Private Limited and A.K. Capital Services Limited will be the leading managers. The NCDs will be listed on NSE and BSE having a tradable lot size of 1 NCD. Being assigned a rating of [ICRA]AA by ICRA and ‘CARE AA’ by CARE is considered safe and is coming up with 3 investment options.

IIFL NCD Issue Highlights

* IIFL NCD Issue Open date : Aug 04, 2011
* IIFL NCD Issue Close date : Aug 12, 2011
* IIFL NCD Issue Size : Rs 750 Crores
* IIFL NCD Listing : BSE & NSE
* Minimum Application : Rs 5000 or 5 NCDs and in multiples of Rs 1000 thereafter.

IIFL NCDs Issue Allocation Details:
Institutional Segment : Rs.150 Crores
Non Institutional Segment: Rs.150 Crores
Reserved Individual Segment: Rs.300 Crores
Unreserved Individual Segment: Rs.150 Crores

Registrat :

LINK INTIME INDIA Pvt Ltd

You compulsorily need a demat account to have the NCDs. And according to the Indian income tax rules these listed debentures are treated as long term capital asset, if the NCDs are held for a period of 12 months. Non resident Indians (NRIs) & FIIs cannot apply for IIFL NCDs.

1^st option: It’s offering a maturity period of 36 months from the date of allotment of debentures with an annual return of 11.7% interest. Face value along with accrued rate of interest will be paid at the time of redemption.

2^nd option: It’s offering a maturity period of 40 months from the date of allotment of debentures with annual return of 11.7% .You will be getting Rs. 1446.18 along with accrued rate of interest at redemption.

3^rd option: It’s offering a maturity period of 60 months from the date of allotment of debentures with annual return of 11.9% .Face value along with accrued rate of interest will be paid at redemption.

Liquidity, capital appreciation, development, etc are the main reasons of issuing NCDs.

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