SMC Global Securities Limited Zero Coupon 2Y Bond yield has risen over 31%. Its rated A. None of the other corp bond is even remotely near that yield. What is happening?
Where are you seeing this info?
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Paytm money
Ohh not surprising… they are dumb people and have no idea what they are doing.
Never trust them 
Did some digging, and looks like something like this you saw and got excited
So if you look at data it is saying you invest around 1300 and you are getting yield of 32%.
Problem - looked up prospectus of this issue and this 2 year bond is going to Rs. 1210 on maturity
So if you invest 1300 to buy this bond, forget yield, you will be making loss
I checked BSE website and it appears some fools have actually bought it at that price. Feel bad for them, but they are going to get harsh reality check.
Bottom line, do your own yield calculations. Don’t trust those apps. And never trust paytm money
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Thanks. Appreciate you taking the time to look into this.
Just one clarification… based on last closing price…
Price: 1299
Yield: 32.35%
Maturity: 24 Apr 27
At the maturity you wont just get the principal (Rs. 1000)
You’ll get Rs. 1000 + Coupon (Rs. 1210) = Rs. 2210 on the investment of Rs.1299
With 10% TDS, you will still get Rs. 2089 on investment of Rs. 1299
I know its a zero coupon bond.
NO.
You’ll get Rs. 1000 + (Rs. 210) = Rs. 1210 on the investment of Rs.1299
The redemption value at the end of 2 yrs is ₹1,210, this includes the face value of ₹1,000
The actual return across 2 years will be ₹210 (1210-1000), making the effective yield 10% p.a.
₹1000*(1.10)^2 = ₹1,210
So, if you invest ₹1,299 now, your effective yield will be negative, not 32.35%, as you will incur a loss of ₹89 per bond, unless you can dump it on a greater fool, who is willing to buy it at a higher price.
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ig you were ready with the data 
; just waited to know how op got the info
bro…
If you click on invest on the Paytm money app, it shows you the complete breakup of the money you will receive from the bond.
Lol no. I had no idea. I only started looking at it once he said Paytm Money
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Nope, unfortunately that is not the case.
Offering is pretty clear, in total you will get Rs. 1210 on redemption.
Can you post a snap of what breakup they paytm money is showing?
My account is inactive and can’t go beyond first screen.
Anyways I have also written to paytm helpline to explain how they are calculating 32%
And knowing their track record, I am pretty confident that they have messed up.
Please do not invest thinking you are getting 32%
Wow, I knew they were dumb. Never realized they are idiots.
This definitely wrong. DO NOT buy this.
Go look at prospectus filed by company with SEBI
SEBI | SMC GLOBAL SECURITIES LIMITED - Prospectus
page 251 has details of each NCD. Clearly mentions maturity value as 1210, there is nothing else.
Still not convinced? check further … issue price is 1000 rs and effective yield shown is 10% (at time of issue in Apr 2025)
So now think, a bond issued for 1000 was giving yield of 10% at time of issue. Same bond if I buy at 1300, can it ever give 32%?
That seems right.
How can they show such incorrect info on the portal. Shouldnt this be flagged?
I wrote to the helpline seeking clarification.
I’ve bought a piece for about 1300 before posting here just to see what its about.
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Let us know what they have to say
No response yet
An update on the current trading price of the ZCB/NCDs of SMC Global (SMCG240425 & SMCGS24425) that was discussed in this thread.
Back when this thread started, I had set an alert to trigger when the price of these bonds fall below their issue price/face value.
Seems like in the last couple of days they have been falling, and falling at a rate faster than they rose, as if this was a pump and dump of sorts in Bonds.
When you already know that the yield of the bond is 10% p.a., it defies all logic when ppl are willing to buy at 20% or 30% or 40% above their issue price (i.e., the returns that ppl made in just a couple of weeks from these bonds was more than the cumulative return that one could earn by holding the bond for 2 or 3 years)
Do all corporate bonds happen to be this volatile defying all logic or is it just the illiquid ones ?
I’m sure the ones who bought these bonds at its peak price will expect/wait for it to rise again. And given how the prices skyrocketed earlier, they may not be wrong to assume that way i.e., expecting there would always be a greater fool out there.
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No, bonds generally do not trade like this, nor do I think this was pump and dump.
This was more like ignorant investor meeting dumb broker scenario
I am fairly confident this is what happened:
- SMC global in their bond prospectus had a small typo in Cashflow on page 718 of prospectus
Instead of showing single cumulative payment of Rs. 1210 at maturity, they showed two payment of Rs. 1000 and Rs. 1210, most likely copy paste error.
Ideally this wouldn’t mater as bond were clearly issued with a coupon rate of 10% and that is what any sane investor look at. I doubt anyone even foes to page 718 of prospectus
- But here comes our dumb broker PayTM money. I think some intern built the bond module their and they simply picked up cashflow from page 718.
This is what they show in their app - invest 1000 in 2 years you will get 1000 + 1210 = 2210 so yield of 32%
Again anyone with a bit of bond experience would have caught this. But no PayTM money
- Enters dumb investors - who are targeted by all this new age platforms. Typically, why invest in FD at 7-8% where we can give you higher yielding bonds.
People saw that this bond is offering 30% + returns and started buying this at astronomically high prices.
Either these investors had no idea how bond works or were unable to calculate yield on their own.
- It appears at some point PayTM money realized their mistake (someone would have told them) and they quietly corrected their mistake. So now this is no longer offering that astronomical returns. and prices crashed
Frankly I am not even sure whom to blame in this scenario.
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I had already contacted Paytm support back in May soon after its listing for this. This is how their clueless CS reply:
FTFY 
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