PFC BONDS Investment

I read an article in Money cobtrol that PFC is floating bonds carrying 7.5 per cent interest. Can retail investor buy them ? Is it possible through Zerodha?
Please inform. Thanks.

@Bhuvan, Can you, pkease?

Yes, issue is for retail bond holders too. Issue is starting today and will continue till 29th Jan. But chances are it might get closed earlier if it is oversubscribed. I don’t think zerodha still has a feature for applying for NCD. But other service providers allow it. I also have ICICIdirect account and it is allowing to apply from there.
One correction though, max interest rate is 7.15% for 15 year bond

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Afraid not, we’re working on allowing subscription debt IPOs and will take some time. You can purchase these bonds once they list.

Thank you, Akash, for the prompt reply. I have icici account also. I shall apply via them.
Thanks a lot.

I noticed that GoldenPi (@GoldenPi) is allowing to apply for this debt IPO

Prayag, That’s fine. I shall check.
Thanj you.

Ok Bhuvan, Thank you.

A correction in my early reply. I don’t have icici direct account. I have to go through Goldenpi only.

Try applying through one of the lead managers. I applied through , it was super easy

Ok Akash. Thanks.

Guys that pfc ncd is useless. The 7% rate is for 10-15 Year. The 3 year period offers poor rate. Dont apply 10 year. Rate will increase meanwhile even in FD

That’s a pretty broad generalization @ksksat. It might look useless to you but 7% for 10 years by PSU is good yield in today’s environment. Especially when 10 year Gsec is below 6.
Also you need to understand that FDs, even if they increase slightly in coming days (right now sub 6) won’t give you fixed return for 10/15 years. Different people have different needs.

Banks interest rates may go to 2% if the scenario continues. So, comparatively, Bond yields better as of now.

Sir simple rbi floating rate bond gives 7.1% now. This depends on post office nsc rate + extra basis points. Term just six years

Getting locked for 15 years for mere 2% higher rate is not worth

Ok. Understand.

I don’t think you understand difference between fixed rate and floating rate bonds. In current scenario where globally yield is reaching 0 or even negative, those floating rate bonds are going to give less rate with every passing year. And that’s the reason people are flocking such higher yield bonds.
If you still have doubts check subscription figures of Bharat bond etf launched few months back which was showing indicative rate of 6.8% for 10 years and got heavily oversubscribed.

Anyways, it’s your choice to invest or not. But don’t be surprised if this gets oversubscribed in couple of days.

The example of particular GOI floating rate has a clause that it is always post office NSC + 35 basis points. Now forgetting US style, our central govt never ever reduces post office NSC below a certain level. Senior citizen pensioners Post office mis kissan vikas wat not

That way this GOI floating rate alone lets compare. PFC is giving 7 % for 15 years lockout. In market this bond will never sell at more than bond offer price

In 15 years i am sure inflation cycle will change leading to higher revision of int rates

@ksksat time for quarterly update

Well yesterday govt did decide to reduce NSC rate from 6.8 to 5.9, a whooping drop of 0.9%. And rate on every other product with it.
Luckily for us, they realized that elections are going on and pulled back reduction.
So for this quarter your “never ever” assumptions stays. Let’s see what happens next quarter

Today 15 year PFC bond are trading at rs. 1030. So 3% capital appreciation in around 2.5 months.

So for this quarter RBI floating bond at 7.15% and PFC 15years also at 7.15%.

Let’s see what happens next quarter.