ICICI has entered the markets again with a public issue of unsecured redeemable bonds in the nature of debentures aggregating Rs 4 bn with a right to retain over-subscription of upto Rs 4bn. This is the second time ICICI has tapped the markets over the last six months. The issue closes on June 29.

Like earlier bond issues, this one has all the regular options targeting a range of investors:

• Encash Bond
• Regular Income Bond
• Money Multiplier Bond
• Children Growth Bond
• Pension Bond

The current bond offer by ICICI is very similar to other bonds in the market. Even the returns are almost comparable to any other debt instrument in the market. However, the Encash bond may catch the investor’s eye due to its liquidity. The Bond offers good liquidity as it can be redeemed any time after one year. The interest rate being offered by this bond is marginally higher then what a bank fixed deposit would give, which makes it quite attractive.

Since these bonds do not have the put/call option, the investor can rest assured that he will get whatever he is promised in the bond as neither party can withdraw. And if you are among those who strongly believe that over the long-term interest rates are going to move southwards it is a good idea to lock your fund in these bonds and fetch relatively higher returns in the further.

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