Invest in bonds with 9-11% fixed returns
Earn higher return than FD, lower risk than equity. Start with just ₹10,000.
Get Started
Banner image
Home>Bonds India>NBFC Bonds
Filter by
Reset filters
Issuer Type
PSU
NON PSU
Credit Rating
AAA
AA+
AA
AA-
A+
A
A-
BBB+
BBB
BBB-
BB+
BB
BB-
B+
B
B-
C+
C
C-
D
Rating Agency
CRISIL
ICRA
CARE
India Ratings
Brickwork
Infomerics
Acuité
Coupon Rate
to
%
Interest Payment Frequency
Quarterly
Monthly
Semi-Annually
Annually
On Maturity
Remaining Maturity
to
years
Returns Type
Taxable
Taxfree
Seniority In Repayment
Senior
Additional Tier 1
Subordinate Tier 1
Subordinate Tier 2
Subordinate Tier 2-Upper
Subordinate Tier 2-Lower
Subordinate Tier 3
Instrument Security
Secured
Unsecured
Instrument Status
Listed
Unlisted
Perpetual
Yes
No

List of NBFC Bonds

Its name itself is a clear indicator of the meaning of NBFC bonds. NBFC bonds are those issued by Non-Banking Financial Companies (NBFCs). NBFCs have a lending business that is similar to that of banks. However, unlike banks, NBFCs can only accept term deposits if approved by the Reserve Bank of India (RBI). Therefore, they use different means to get funds for lending. This is where NBFC bonds step in. Usually, the interest rate offered by an NBFC bond is on the higher end, yet it depends on their respective credit ratings.

Showing 4196 Bonds
Sortsort-icon

Sort By

Coupon
high to low
Rating
high to low
Maturity
high to low
low to high
NameIssue SizeMaturityCoupon
Kotak Mahindra Prime LimitedCRISIL AAAINE916D08DT240.00Cr22 Jun 202310.50 %
Poonawalla Fincorp LimitedCRISIL AAAINE511C0898535.00Cr07 Dec 202610.40 %
Poonawalla Fincorp LimitedCRISIL AAAINE511C08AD315.00Cr06 Jan 202710.40 %
Poonawalla Fincorp LimitedCRISIL AAAINE511C08AE125.00Cr24 Jan 202710.40 %
Poonawalla Fincorp LimitedCRISIL AAAINE511C08AG615.00Cr03 Mar 202710.25 %
Poonawalla Fincorp LimitedCRISIL AAAINE511C08AK85.00Cr06 Jun 202510.20 %
HDB Financial Services LimitedCRISIL AAAINE756I08041100.00Cr17 Oct 202310.20 %
HDB Financial Services LimitedCRISIL AAAINE756I0806680.00Cr18 Mar 202410.19 %
Bajaj Finance LimitedCRISIL AAAINE296A08714500.00Cr19 Sep 202410.15 %
Tata Capital Financial Services LimitedCRISIL AAAINE306N08029100.00Cr26 Sep 202410.15 %
Invest in bonds with 9-11% fixed returns
Earn higher return than FD, lower risk than equity. Start with just ₹10,000.
Explore Now
Banner image

Who Issues NBFC Bonds?

Non-Banking Financial Banks, or NBFCs, issue these bonds to retail and institutional investors. They can issue various kinds of bonds, such as Commercial Papers (CPs), Non-Convertible Debentures (NCDs), and Market Linked Debentures (MLDs).

Also Read: Which NBFCs Does Wint Wealth Choose to Work With?

Benefits of NBFC Bonds

NBFC bonds have several benefits, as discussed below:

  • NBFC bonds usually pay higher interest than bank fixed deposits.
  • Presently the NBFCs that issue these bonds are reputed and well-capitalised, carrying higher credit ratings. Hence, it makes them a credible investment.
  • NBFC bonds are regulated by the Reserve Bank of India (RBI), making them relatively less risky.

Drawbacks of NBFC Bonds

As every coin has two sides, so do NBFC bonds. Below we have listed a few drawbacks of NBFC bonds:

  • Although they carry higher credit ratings or are regulated by the RBI, NBFC bonds are risky. They do carry risks such as interest rate risk, reinvestment risk, and so on.
  • Moreover, as the chief purpose of issuing these bonds is to further lend to borrowers, they inherently carry credit risk.

How to Calculate Yields of NBFC Bonds?

A yield is a number that shows the returns of any bond. Many times it is referred to as Yield to Maturity (YTM). You receive interest payments based on the coupon rate. You can calculate the YTM using the below formula:
YTM = [Annual Interest + {(FV - Price)/Maturity}]/[(FV+Price)/2]

Where,

YTM = Yield to Maturity
Annual Interest = Coupon payment that you receive annually.
FV = Face Value
Price  = Current Market Price of the Bond
Maturity = Number of years left till maturity

Let’s take an example to understand it better. Assume you invest in a bond having the following characteristics:

ParticularsValues
Face Value  ₹1,000
Annual Coupon Rate  7%
Annual Interest Payout  ₹70
Time to Maturity  5 years
Current Market Value of the Bond  ₹850

So, if we plug in all the values in the above formula, the YTM for the bond in the example works out to be 10.8%:

YTM = [70 + {(1000-850)/5}] / [(1000+850)/2]

However, if we change the bond's current market value to ₹1,100, the YTM is 4.8%. From this, we can understand the relationship between YTM and bond prices. As and when YTM increases, bond prices decrease and vice versa.

However, a lot of people often confuse YTM with coupons. A coupon is a predetermined rate when you buy the bond, while the YTM is the prevailing market rate of the bond.

How are NBFC bonds taxed?

NBFC bonds are taxed similarly to other debt securities excluding tax-saving bonds. In the case of NBFC bonds, any interest earned is taxed as per the individual tax slabs.

For listed NBFC bonds, any period above 12 months is considered long-term. Hence, those gains arising before the 12 months are deemed Short-Term Capital Gains (STCG). Otherwise, it is regarded as a Long-Term Capital Gains Tax (LTCG). If the same are unlisted, then the period is 36 months.

In the case of STCG, the gains are added to the investor’s income and taxed as per individual tax slabs. In the case of LTCG, gains are taxed at 10% without indexation benefit if listed and 20% without indexation benefit if unlisted, plus any surcharge. Moreover, even the Tax Deducted at Source (TDS) of 10% applies.

Who Should Invest in NBFC Bonds?

These bonds might be suitable for those who have a high-risk appetite and are seeking higher returns. However, if you are someone for whom safety is the top priority, you should consider bank fixed deposits. This certainly depends upon the individual’s risk appetite and financial goal.

FAQs about NBFC Bonds

What are NBFC bonds?

NBFC bonds are securities issued by NBFCs (Non-Banking Financial Companies). Several kinds of NBFC bonds include CPs (Commercial Papers), MLDs (Market Linked Debentures), and NCDs (Non-Convertible Debentures).

Is it good to invest in NBFC in India?

NBFC bonds with AAA credit ratings are deemed to be safe. However, still, they are not entirely risk-free. Therefore, you must assess your investment objectives, time horizon, and risk tolerance before investing in them.

What is the difference between bank FD and NBFC FD?

Bank FDs (Fixed Deposits) are deemed to be safer than NBFC FDs. This is because even if the banks are likely to default, there is insurance available from DICGC (Deposit Insurance and Credit Guarantee Corporation) worth ₹5 lakhs per bank. However, there is no such safety net available to NBFC FDs.

Is 5-year FD tax-free?

The 5-year tax saving FDs allow you to deduct ₹1.5 lakhs under section 80C of the Income Tax Act of 1961. However, the interest earned on these FDs is added to your income and is taxed as per individual tax slabs.

Is TDS deducted on private bonds?

TDS (Tax Deducted at Source) of 10% applies to NBFC bonds.
Disclaimer: The facts and information on this page are for information and awareness purposes only. No information provided here is intended towards any specific user and should not be construed as investment advice or a recommendation of any kind whatsoever. You are requested to consult with your professional investment advisor or tax advisor for specific directions on any investments in any securities including the bonds mentioned on this page before making any investment decision. Wint Wealth shall not be liable for any losses incurred by you based on an investment decision utilising the information on this page.