From THE HINDU group of publications
Sunday, October 28, 2001
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From THE HINDU group of publications Sunday, October 28, 2001 |
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Essar Oil: Unattractive
Recommendation: Unattractive
Reshma Krishnan
Essar Oil issued this bond at a face value of Rs 105.
It affects a coupon 14 per cent, payable semi-annually. The bond is to be redeemed in April 2003 at the face value of Rs 105. It now trades much lower then its issue price at Rs 30. This low price is probably because of the default rating. This means that the obligation has either been in default or is expected to.
On account of this low market price, the YTM on the current market price is very high. The bond is liquid, probably traded on speculative basis. Investing in this bond is highly risky and investors should avoid exposures.
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