NHAI Issue - Tax Free Secured Redeemable Non-convertible bonds- Crisill AAA/Stable

Just got a mail about these bonds the issue for which will open on 28th Dec. The prospectus says that they will be listed on NSE + BSE. What exactly does it mean ? Suppose I buy these bonds for Rs. 51000, can I sell them to you for a premium just like equities ??

Download the brochure from here.


PS : Mods, I couldn't find an appropriate section for this topic so posting it in Equities section.

Re: NHAI Issue - Tax Free Secured Redeemable Non-convertible bonds- Crisill AAA/Stabl

Bond Markets work in a very different manner than equities..... First of all, you need to have access to the Debt Market Segment of NSE..... which I doubt you have at present.... it's a different segment just like Cash, F&O, Currency Derivatives are different segments.....

I don't have any practical knowledge about Bonds..... but I have to study about them in my Academic Curriculum..... Have recently started that Chapter..... So, the following is based on whatever I have read till now.....

1. This is probably the best time to buy Bonds.... Why? Because the Interest Rates are at its peak..... You are going to get the best yields if you buy now.... As the Interest Rates drop, the Market Price of Bonds are going to rise providing you better yields.....

2. Coupon Rate is the worst indicator for the yield you are going to get.....

3. If you want to block the funds in Bond for 3.5-4years, then Buy the Bonds with Maturity of 5years..... Similarly, if you want to block the funds for 6-7yrs, buy the bonds with maturity of 10yrs.... In short, determine the period you wish to block the funds and then buy the Bonds which have a maturity more than that.... Let me know your Duration, I would suggest the maturity.....

PS: I have not gone thru the Brochure.... These are just based on whatever, I have read till now.....

Re: NHAI Issue - Tax Free Secured Redeemable Non-convertible bonds- Crisill AAA/Stabl

What I am confused about is that they will be tradeable on NSE/BSE. Do NSE/BSE have a debt market segment ? I don't know. I am less than zero in Bonds.

Will this be better than FDs / NSC which are quite attractive nowadays ? Anyway, these are being offered for 10 years (8.2% pa) and 15% (8.3% pa).

What I really want to know is, since these will be available in demat form, will we able to get DP to margin on them ?

Re: NHAI Issue - Tax Free Secured Redeemable Non-convertible bonds- Crisill AAA/Stabl

NSE does have a Debt Market Segment.... This is the link to Retail Debt Market..... Look under Products on that page.... Don't ask the difference between Retail, Wholesale & Corporate Bonds.... Even I am unaware about it... However, I don't know about the liquidity and turnover in the segment..... This might create an hindrance while selling.....

Regarding comparison with FD's..... I can't really give you a concrete answer... But I guess Bonds should provide better returns.... As I said previously, as the interest rates start to come down, the market price of the Bonds should start rising and provide you better returns..... But..... I don't have any practical experience...... I have shared whatever I had read till now...... I am yet to finish the whole chapter....

And margin on DP.... I am as confused as you are... Better to ask the DP..... Would suggest you to email them, rather than asking your RM......

Again, this is an asset for you and you should be able to get margin on them..... Afterall, it's a AAA rating Bond..... and NHAI is a Govt. entity... so no risk of default..... Force them to give margin on it.....

Re: NHAI Issue - Tax Free Secured Redeemable Non-convertible bonds- Crisill AAA/Stabl

Certain issues like NCD etc. are listed under normal Equity segment of NSE. One does not need access to RDM for trading in them. Bonds of L&T, Tata Tea etc are listed there and tradable too. But mostly there is a large spread : the difference in Sell and Buy rates is big!!
I am not sure where the NHAI issue will be listed.

Re: NHAI Issue - Tax Free Secured Redeemable Non-convertible bonds- Crisill AAA/Stabl

In NSE there is a category : Bonds traded in CM. One can visit this linl for some details :
http://nseindia.com/live_market/dynaContent/live_watch/equities_stock_watch.htm?cat=SEC