Sir i want to invest in Muthoot finance NCD’S. They are saying there is 100% return. Is it safe enough to invest? Are they reliable?
Thre are two types of NCDs. One is secured, where these are backed by the assets of the company and if company fails to pay the obligation, the investor holding the debenture can claim it through liquidation of these assets. Second one is unsecured, where there is no back in case of default. So check whether what type of NCD is you are going to invest. Second, check the rating of the company. Higher the rating means lower the interest and lower the possibility of default. But keep in mind that these ratings can change in future based on the health of company. Considering these factors, if you feel it is safe then go ahead. In my view, I try to avoid.
sir muthoot finance is issuing secured NCDs and are assuring return without default.whats your take?