Indiainfoline Investment is coming out with a debenture of 5 years duration – at an attractive rate of 11.9%p.a.

The short question is ‘Should you invest in these debentures?’

Well the Shriram group (Chennai based) is coming out with a debenture at a coupon rate of 12.3% p.a. in about a weeks time.

So should you invest – it is a call that you have to take. Day before yesterday I got a call saying there was a premium available on listing – currently it has just vanished.

My take is: If you trust the management and are willing to take a 5 year call (you run the risk of there being an illiquid market) invest. If you are hoping to make money on listing, forget it.

If you are hoping to hold – keep a small amount of investment here …and invest more in the Shriram offering. Chances are as soon as the Shriram announcement hits the market, the Indiainfoline premium will change into a discount…

your call…!!

  1. Subra, for the past 6 months, this is 1st time, I have seen you make a direct suggestion with names etc, if I may say, on something which is available in the market currently.

    Me, from Chennai. I still remember Sterling / Maxworth group, many Chit & Benefit funds (anybody remember Royapettah Benefit Fund ?) which have shut shop, defrauding investors. As with any city, we have our share of fraudsters. Shriram may not be one. This comment got triggered is because of your mention of Chennai based in brackets. (Chennai based or not, one should duly do due diligence.)

    That said, your post is valuable. Know a little bit about Stock / Mutual Funds, but less about the Bond & Company FD offerings and the market intricacies in there! I think, this may be true for many visitors too!

  2. when I said Chennai based I meant it as an identification – there is a Delhi based Shriram too – DCM. There is nothing to say that no due diligence needs to be done. BY WAY OF disclosure, I WILL NOT BE PUTTING any money in Indiainfoline or in Shriram. As far as I am concerned debt means AAA like SBI.

    I am not suggesting anything to say that these are good or bad..just saying do not look for listing gains, it will not be there…and be ready for downgrades..and I do not take 5 year calls on my life, why should I take it on these 2 companies?

    so caveat once again: THIS IS JUST GENERAL GYAN, PERSONALLY I WILL BE WATCHING THE ISSUE FROM THE SIDELINES. MY MONEY IS IN EQUITIES..

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