tag:blogger.com,1999:blog-5160674059772417323.post4556459742633180085..comments2024-03-03T17:26:46.979+05:30Comments on Calculated Wagers: Tata Capital NCDs- Why this inefficiency ?Ankur Jainhttp://www.blogger.com/profile/01368912969506438596noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-5160674059772417323.post-14791395558676387412015-05-30T12:58:18.071+05:302015-05-30T12:58:18.071+05:30Thanks for the response Ankur. I guess the numbers...Thanks for the response Ankur. I guess the numbers taken by me look ok as per your post - <br /><br />(For Option III discussed in the opening paragraph, the coupon has been reduced from 12% per annum to 10.50 % for the rest of the maturity period which is 2 years and 2 months from now.That is a sharp reduction and I concluded that market participants will factor this new development . I quickly calculated that for the IRR to remain at 10.2%, the price of the debenture should come down to Rs 1108 which is 26 bucks lower than the Saturday's closing price of 1134.)<br /><br />Have I missed anything?<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5160674059772417323.post-25306148641595527922015-05-29T18:16:16.678+05:302015-05-29T18:16:16.678+05:30Hi Anon,
I don't remember the workings now. B...Hi Anon,<br /><br />I don't remember the workings now. But I would suggest you recheck the dates which you are putting in your workings.<br /><br />Most likely, I sense some discrepancy there.<br /><br />Regards<br /><br />AnkurAnkur Jainhttps://www.blogger.com/profile/01368912969506438596noreply@blogger.comtag:blogger.com,1999:blog-5160674059772417323.post-96557514648730572015-05-19T14:31:42.493+05:302015-05-19T14:31:42.493+05:30Hi Ankur,
I just came across this post. I had a q...Hi Ankur,<br /><br />I just came across this post. I had a question regarding your following statement (I quickly calculated that for the IRR to remain at 10.2%, the price of the debenture should come down to Rs 1108 which is 26 bucks lower than the Saturday's closing price of 1134.)<br /><br />If I work it out (buy at year 0 -1108, year 1 interest 105, year 2 interest + face value 1105), the IRR comes to 4.72% instead of 10.2% mentioned by you. I have ignored additional 2 months of maturity to keep the math simple. <br /><br />Would appreciate if you could through some light on how you calculated your IRR.<br /><br />Thanks<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5160674059772417323.post-29319269183998786012012-01-12T22:36:03.565+05:302012-01-12T22:36:03.565+05:30My Apologies Jain Sahab. Completely missed that on...My Apologies Jain Sahab. Completely missed that one. ThanksAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5160674059772417323.post-59571288601646513742012-01-12T21:48:37.178+05:302012-01-12T21:48:37.178+05:30Hi Mayur,
I didn't say that one should not in...Hi Mayur,<br /><br />I didn't say that one should not invest in bonds with call/ exercise options.<br /><br />Rather one should be cognizant about these options and factor them in the workings while investing.<br /><br />AnkurAnkur Jainhttps://www.blogger.com/profile/01368912969506438596noreply@blogger.comtag:blogger.com,1999:blog-5160674059772417323.post-19322046324857240942012-01-12T21:43:10.318+05:302012-01-12T21:43:10.318+05:30Hi Sunil,
I don't think the move to reduce th...Hi Sunil,<br /><br />I don't think the move to reduce the coupon rate needs a nod from the debenture holders. <br /><br />I checked the proposal as well. It says that if bonholders don't want to continue with the reduced rate, they can opt from premature redemption on March 05, 2012.<br /><br />Regards<br />AnkurAnkur Jainhttps://www.blogger.com/profile/01368912969506438596noreply@blogger.comtag:blogger.com,1999:blog-5160674059772417323.post-37010933137766634952012-01-12T20:30:11.394+05:302012-01-12T20:30:11.394+05:30Jain Sahab,
Since the scheme still needs to be ap...Jain Sahab,<br /><br />Since the scheme still needs to be approved by the debenture holders, the extra Rs10 (now reduced) might be due to the option value of a possible rejection of the proposal by NCD holders.<br /><br />Regards<br /><br />Sunil.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5160674059772417323.post-34978978338262260112012-01-11T11:07:14.080+05:302012-01-11T11:07:14.080+05:30Hi Ankur,
You are doing great work.
Formatting doe...Hi Ankur,<br />You are doing great work.<br />Formatting doesn't matter. every serious reader is interested in contents only.I have subscribed to your RSS feed.<br />Keep it up!<br /><br />Best of Luck<br />Sameersameerhttps://www.blogger.com/profile/05869170720607504112noreply@blogger.comtag:blogger.com,1999:blog-5160674059772417323.post-90159526565755415272012-01-10T07:31:19.762+05:302012-01-10T07:31:19.762+05:30So you meant say to say we shouldn't invest, i...So you meant say to say we shouldn't invest, if the Company has the right to Call/Exercise the option which is in the interest of the issuer and not the investor.Mayur Jainhttps://www.blogger.com/profile/03226990681108566491noreply@blogger.com