investors are turning towards fixedincome options due to the volatile equity markets and doubledigit returns from fixedincome products nonconvertible debentures are especially becoming popular due to their high liquidity on account of being listed on the stock exchanges and the higher coupon rates the last issue of shriram transport finance was oversubscribed on day 1 itselfindia infoline investment services an nbfc subsidiary of india infoline iifl is coming out with ncds of a face value of 1000 each aggregating to rs 375 crore with an option to retain oversubscription of up to rs 375 crore which if exercised will make the issue size rs 750 crore the product the debentures will be offered on a firstcome firstserve basis the issue opens on august 4 and closes on august 12 with the company having the option to close the issue earlier there are three options in the ncds option i annual interest payment the redemption date or maturity period is 36 months from the deemed date of allotment and the coupon rate is 117 per annum the interest payment is annual and the face value plus any interest that may have accrued is payable on redemption option ii each ncd will be redeemed at 144618 40 months after the deemed date of allotment giving a yield of 117 per annum option iii annual interest payment the redemption date or maturity period is 60 months from the deemed date of allotment the coupon rate is 119 per annum for category iii investors and 117 per annum for others the interest payment is annual and the face value plus any interest that may have accrued is payable on redemption there is no putcall facility in any of the options the ncds have a face value of 1000 and one can apply for a minimum of 5000 the ncds have been rated aa stable by icra and aa by care indicating high degree of safety for timely servicing of financial obligations the interest payable would be taxable but no tax will be deducted at source tds the ncds would be listed on the national stock exchange nsewhy apply the coupon rate is attractive for retail investors especially in the 5year category option 3 at 119 even if you are in the highest tax bracket the posttax returns are a decent 83 why you shouldnt ncds are illiquid since the issuances are small some earlier ncd issues of shriram transport series ng and lt finance series n5 are available in the secondary market with a yield ranging between 119 and 1310 which is slightly higher than the yield from iifls ncds