Fixed Income @ 10.32+% with Sovereign Security

Personal Finance ✔️
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The Urban Planning Agency known as the Andhra Pradesh Capital Region Development Authority (APCRDA), which later became the Amaravati Metropolitan Region Development Authority, was established on July 31, 2020. Its headquarters is located in Vijayawada, and it operates under the Ministry of Municipal Administration & Urban Development.

In order to fulfill its capital needs, APCRDA raised funds from the public in 2018 by issuing bonds, as detailed below.

BSE Symbol ISIN Allotment Coupon Maturity Issue Size Rating assigned with Ioutlook
1032APCRD24 INE01E708016 16-Aug-18 10.32% 16-Aug-24 400 Cr. CRISIL A-(CE)/Stable
1032APCRD25 INE01E708024 16-Aug-18 10.32% 16-Aug-25 400 Cr. CRISIL A-(CE)/Stable
1032APCRD26 INE01E708032 16-Aug-18 10.32% 16-Aug-26 400 Cr. CRISIL A-(CE)/Stable
1032APCRD27 INE01E708040 16-Aug-18 10.32% 16-Aug-27 400 Cr. CRISIL A-(CE)/Stable
1032APCRD28 INE01E708057 16-Aug-18 10.32% 16-Aug-28 400 Cr. CRISIL A-(CE)/Stable

Highlights:

This bond presents an opportunity for long-term investment with quarterly returns. The coupon rate is 10.32%, meaning that for every 2 lakh investment, you will receive Rs. 20,640 as yearly interest (remember with sovereign guarantee ).

What’s the catch?

These bonds are traded on the BSE Exchange, specifically under the F series. Often, they can be purchased below their face value, which ultimately increases your effective rate of return.

Why is the bond so appealing?

The bond carries an unconditional and irrevocable guarantee from the Government of Andhra Pradesh (GoAP) for both the interest and principal obligations.

What are your thoughts on this investment option? Let’s continue this thread to discuss it further.

– Shrimohan
Product Operations @ Dhan

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How can we buy these on Dhan? Thanks in advance.

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@ekveer As of now the BSE F series is not yet enabled on the front-end as we are building a product entirely for the Bonds. The F series consists of bonds and has around 38k+ listed securities and the mechanics of selecting one of them requires a lot of filters and analysis, which is difficult for retail traders / investors.

However, you can use our call and trade facility for the same or connect with our CS team to get the order placed from backend.

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They are highly illiquid. Not able to purchase!

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@Shally agree. Hence need to be quite active while dealing with bonds. People usually keep a best bid manually or keep an active algo. However, at times they are available at some price over the face value which decreases the ROI by about a few bps. If the dip is not substantial, its always recommended to buy at ASK.

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Can this be pledged if at all we manage to buy :slightly_smiling_face:

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@pavz Unfortunately No. Though they are state backed and cashflow is quite certain as they are illiquid in the secondary market so incase the client is in debit, the broker cannot sell it immediately. Usually holders of these bonds, pledge these bonds to Banks and NBFCs for borrowing needs, hence mainly money market instrument.

PS: Depth of money market is much much greater than stock market! :smiley:

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