Fintotal News Analysis | INDIA INFOLINE HOUSING FINANCE LIMITED (IIHFL) Home bonds December 12th Bonds issue
Kripananda Chidambaram, 10 Dec 2013

IIHFL is a subsidiary of India Infoline Finance Ltd and is raising Rs 250 crs from the public through issue of non-convertible debentures.  The bond issue is open from 12 December 2013 to 20 December 2013. The minimum investment amount is Rs 10,000 and it matures after 5 years.

What are these NCDs and how safe are they?

NCDs are similar to bank fixed deposits in the sense your capital is fairly safe and you get fixed assured interest.  To know how safe these bonds are we need to refer to the risk ratings given by neutral rating agencies like CRISIL and CARE. Both of these firms have rated AA- indicating that it has a high degree of safety regarding timely interest payments and low risk of losing your capital.

Is IIFL Home bonds good investment option?

Even before knowing whether a product is good or bad, you need to determine what you are investing for. If you invest Rs 1,00,000 in these bonds you will be paid Rs 980 every month and after 60 months your Rs 1,00,000 will be returned.

It is a good investment option if you are purely looking at returns.  We recommend this bond for those who are looking at monthly income for next five years and have a decent corpus to invest in.

But for those who are just looking to save money and do not have any need for monthly returns then you can give it a miss as it does not have a cumulative interest payment option. We say this primarily because you will end up just spending the monthly returns and not get the benefit of compounding.

Other features

  • The interest is taxable and the rate is as per the tax slab you fall in 
  • There shall not be any TDS on the interest payment      
  • NRIs are not allowed to invest in these bonds In case you need the money before maturity you can sell the bonds through BSE/NSE

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