Small saving instruments, govt bonds a good alternative to NCDs: Experts

Experts are urging investors to stay conservative in their investment choices

According to recent media reports, over three-fourth of the non-convertible debenture (NCDs) issues from non-banking financial companies (NBFCs) that have hit the markets over the past 10 months have remained under-subscribed. This has happened even though NBFCs have offered mouth-watering interest rates in the range of 9.5-11 per cent.

The primary reason is high risk aversion among investors. “After the defaults and downgrades by IL&FS, DHFL, and a few others, the yield on debt papers of many NBFCs shot up. Many are facing asset-liability (ALM) mismatch. Investors have become very risk averse and only debt papers from reputed corporate houses are