Indiabulls Housing Finance Limited plans to issue secured NCD bonds which will be offered for sale on the 3rd.rd March 2023. Indiabulls Housing Finance Limited is one of the leading Home Finance Companies (HFCs) in India in terms of AUM. Indiabulls Housing Finance NCD’s NCD interest rate is up to 10.15%. These NCDs have tenures of 24 to 60 months. Interest is paid monthly or annually or at maturity. Should you invest in Indiabulls Housing Finance NCD March 2023 issue? What are the risk factors to consider before investing in such high-risk NCDs?
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About Indiables Housing Finance Limited
We are one of the largest Home Finance Companies (HFCs) in India in terms of AUM. It is not a deposit that receives NHB registered HFCs.
The company primarily focuses on long-term secured mortgages. The majority of the loan book consists of secured loans. They primarily provide mortgages and loans for real estate to a target customer base of salaried and self-employed individuals and micro, small and medium enterprises. They also provide Indian property developers with mortgage loans in the form of discounted commercial rental rates and construction finance for the construction of residential properties.
Indiabulls Housing Finance NCD – Issue Details
Here are the details of the problem.
| Opening date | March 3, 23 |
| closing day | March 17, 23 |
| Type of security | Protected, redeemable, non-exchangeable NCDs |
| issue size (base) | 100 million rupees |
| Issue size (oversubscription) | Rs 800 cror |
| total issue size | Rs 900 cror |
| issue price | Rs 1,000 per bond |
| face value | Rs 1,000 per bond |
| Minimum lot size | 10 bonds and then 1 bond |
| term of office | 24-60 months |
| Interest payment frequency | Monthly, Yearly, At Maturity |
| listing | Within 6 business days for BSE/NSE |
These are assigned on a first-come, first-served basis. If there is a flood of applications before the deadline, you can close early.
NRIs are not applicable to this NCD subscription.
Edelweiss Financial Services, AK Capital Services, IIFL Securities and Trust Investment Advisors are acting as lead underwriters on the matter.
Indiabulls Home Finance NCD – Interest Rates
according to Indiabulls Housing Finance NCD Prospectus The interest rates for Indiabulls Housing Finance for Category III and IV investors (including private investors) as filed with SEBI are as follows:
| Series –> | I | Ⅱ | Ⅲ | Ⅳ | X | Ⅵ | VII | VIII |
| Interest payment frequency | a year | monthly | Cumulative | a year | monthly | Cumulative | a year | monthly |
| Duration (months) | twenty four | twenty four | twenty four | 36 | 36 | 36 | 60 | 60 |
| Coupon (annual rate) | 9.65% | 9.25 | NAMore | 9.90% | 9.48% | NAMore | 10.15% | 9.71% |
| Effective yield (%/year) | 9.64% | 9.64% | 9.65% | 9.88% | 9.89% | 9.90% | 10.14% | 10.15% |
| Maturity (Rs.) | 1,000 | 1,000 | 1,000 | Chidori* | Chidori* | 1,309 | Chidori** | Chidori** |
*From Year 1* to Maturity, staggered redemption in 3 annual payments of INR 333 for 1st year, INR 333 for 2nd year and INR 334 for 3rd year
** Phased redemption in 5 annual payments of INR 200 each from 1st anniversary* until maturity
Indiabulls Home Finance NCD – Credit Rating
These NCDs are rated CRISIL AA / Stable by CRISIL Ratings and ICRA AA Stable by ICRA. Products with this rating are considered to have the highest degree of security with respect to timely servicing of financial obligations. The credit risk of such financial instruments is very low.
What are the company’s profits?
Click here for details of consolidated financial statements.
Year ending March 2020 – Rs 2,165 Crores
Year ending March 2021 – Rs 1,201 Crores
Year ending March 2022 – Rs 1,177 Crores
Indiabulls Home Finance NCD – Why invest?
1) Indiabulls Housing Finance Bonds offer attractive interest rates, allowing investors to earn up to 10.15% interest per annum.
2) Issue a secure NCD. A protected NCD is more secure than an unprotected NCD. If the company is liquidated/closed for any reason, a safe NCD investor will prioritize repayment of capital along with interest as backed by the company’s assets. Hence investing in such safe NCD options is safe to do.
3) The company has a good AA/Stable credit rating from CRISIL and ICRA.
Indiabulls Home Finance NCD – Why not invest?
1) The company’s revenue is on the decline.
2) The recent covid-19 outbreak and lockdown has impacted the company’s business. Such occurrences in the future are unpredictable and may affect the Company’s operations.
3) An increase in NPA can impact your business.
4) See prospectus for full risk factors.
How do I subscribe to these NCDs?
This issue is only available in demat format. You can log into your Demat account, check the NCD section, look for these NCD links and apply for the same. Please refer to the prospectus for details.
Also read: 5 Debt Mutual Funds With Highest SIP Returns (8% to 9%)
Indiabulls Home Finance NCDs – Should You Invest Or Avoid?
Banks and NBFC recently raised FD interest rates. However, Indiabulls Home Finance NCD still offers high interest rates and yields. Indiabulls Housing NCD’s rating is AA Stable by CRISIL and ICRA, which is considered an excellent quality rating.
However, such credit ratings are subject to change at any time. Investors should not forget what happened with some companies like DHFL where NCD investors lost their money. In addition, NBFCs often delay interest payments to investors and repayment of investments.
Since these are safe NCDs, the risk factor is mitigated to some extent. High risk investors can invest in these safe NCDs after considering all these risk factors.
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Suresh KP is the founder of Myinvestmentideas. He is his NISM Certified – Investment Advisor and NISM Certified – Research Analyst. He has been analyzing financial markets for the past 20 years.
