Did Shriram Transport Finance start advertising on television yesterday?

I got many calls seeking advice on ‘Should I invest in…..’ At 11.5% p.a. the returns are not bad for sure. And to think that they are a well managed Nbfc this interest rate does look attractive does it not?

Well Shriram has raised a lot of money in the current year and one wonders how much appetite for money do they have! If they are borrowing at this rate, at what rate are they lending? Of course they are lending at 17% to the best and at 22% for the not so well off.

Personally, if I can get the SBI bond or even the IfCI bond at yields slightly under what Shriram is offering, I would be tempted to take that…..


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  1. Hello Subra,

    Do you mean that we can pass this debenture offering ? I was looking to put in some money in here but was skeptical with regard to the safety of my money since NCDs are not secured loans.
    Any pointers will be helpful to me in deciding.


  2. In addition to what they are offering to customers, they are also incurring issue & launch cost, reporting and maintenance costs at later stage. At 17%, their profit spread could be in the range of 2% which could be wiped off due to NPAs. So they have to lend it at 22% to generate decent profit from the NCDs.

  3. Truly, such high interest rates do tempt but also do make one suspect of it being honey trap.

    Reputation counts.

  4. @sanjay
    i think shriram ncd would be secured debt , secured with the advances they loaned, which could go non performing on latter date, and the principal and or interest returning back would depend on the size of npa at the time. so for safety, sbi bond could be better.

  5. @bharat,
    Thanks for the information. I also got to know from Onemint that in secured NCD, principal also is not guaranteed.
    I am novice in financial world. Now I know that there are “unknown unknowns” in the financial world also. 🙂

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