Is it profitable to buy debentures?

Is it profitable to buy debentures?

Because of the consistent return with little to no fluctuation in value, debentures are considered a lot safer investments than stocks. There is a caveat, though. If a company makes a profit, then it’s the shareholders that mostly reap the benefit from that profit.

Which companies are issuing debentures in India?

NCD Issues Open in India 2021

Company Name Issue Open Issue Close
IIFL Finance Limited Mar 03, 2021 Mar 18, 2021
Muthoot Fincorp Limited Feb 18, 2021 Mar 09, 2021
Power Finance Corporation Limited Jan 15, 2021 Jan 18, 2021
Muthoottu Mini Financiers Limited Jan 13, 2021 Feb 09, 2021

When should you invest in debentures?

Debentures allow companies and governments to raise capital for the long-term without offering assets as collateral. You may choose to invest in debentures as a means of increasing portfolio diversification. It’s important to compare debentures carefully, as some carry more risk than others.

READ ALSO:   Whats the difference between a general and particular solution?

Can we buy NCD from market?

Non-Convertible Debentures (NCDs)/Bonds/ Tax-free bonds are debt instruments that can be bought from your trading account from the secondary market similar to how you buy and sell shares.

Is investment in debentures safe?

NCDs from one single sector (NBFCS that focuses on personal loans) are not safe to invest in. This can lead to higher risk exposure. NCDs from the secondary markets have always delivered higher returns in the past.

Can I sell debentures?

Since NCDs are listed on the stock market they can be sold in the secondary market. Bank FDs attract TDS if gains are beyond Rs. 10,000. Tax implications do apply on NCDs, capital gains need to be paid on the interest earned.

What is the interest rate on debentures?

NCDs may offer a high-interest rate ranging from 7\% to 9\% if held till maturity. Interest payouts are either monthly, quarterly, half-yearly or annually. NCDs do offer a cumulative payout option, as well.