Bonds for the Careful Investor
by Aakash Ahuja | 1 August 2021
Zomato listed with stellar gains.
Leaving aside the ever-raging debate of valuations versus price, if anything, Zomato’s listing gains would only make investors look forward to other most awaited IPOs.
So, while most adventurous investors are super excitedly waiting for the next IPO rush to catch, we found something for the cautious investors too — Corporate bonds with high credit ratings,high coupon rates, listed on NSE, and yes, tax-free.
For the uninitiated, Bonds are like loans issued to companies in return for which they pay you interest. The interest(coupon rate) depends on the tenor and credit rating of the bond.
For the safety of the investors, SEBI has mandated that all bonds berated by independent rating agencies. These agencies look at various factors impacting the capability of a company to be able to return investor money. Accordingly, a rating is associated with every bond.
Bonds with the highest credit rating of AAA have the highest level of safety concerning repayment of principal and periodic interest. Such bonds often pay a lower rate of interest than those that have a lower credit rating.
All public issues of bonds have to be mandatorily listed on a stock exchange. Bonds are less volatile generally and provide a fine balance to your equity-oriented portfolio. They are closely linked to broader economic factors like interest rates. For example, bond prices go down if interest rates rise, and vice versa.
As attractive we may have made a bond sound, this is not an investment advisory. You shall speak to your financial advisor before you invest. Now, let’s look at some of these bonds that can be traded at NSE
HUDCO NE
Coupon Rate: 9.01
Face Value: Rs. 1000
LTP: Rs. 1437
Credit Rating: AA+
PFC N8
Coupon Rate: 8.92
Face Value: Rs. 1000
LTP: Rs. 1440
Credit Rating: AAA
IIFCL N4
Coupon Rate: 8.91
Face Value: Rs. 1000
LTP: Rs. 1410.25
Credit Rating AAA
You can find the entire list here.
Happy investing!
Originally published at: https://blog.prospareto.com/bond-for-careful-investors/
Written By
Aakash Ahuja
Aakash Ahuja is the founder and CEO of itmtbT and has over a decade of experience conducting fundamental and technical research. He writes extensively on books, startups, technology, trading, and investing. Reach out to him at LinkedIn, Twitter.
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Originally published at https://blog.prospareto.com.
