UGRO Capital Secured NCD Bonds will begin offering on October 10, 2024. The company is a non-deposit-taking systemically important NBFC company registered with the RBI. The interest rate is up to 10.4%. These NCDs are issued in three different series with tenor periods of 18 months, 24 months and 30 months. Interest is paid monthly. Should you invest in UGRO Capital NCD October 2024 issue? What are the risk factors to consider before investing in such high-risk NCDs?
About UGRO Capital Limited
UGRO Capital Limited is a systemically important NBFC company that does not accept deposits and is registered with the RBI. It is engaged in the lending business and focuses on the MSME sector in India. The company provides loans to SMEs and MSMEs with a focus on healthcare, education, chemicals, food processing/FMCG, hospitality, electrical appliances and parts, auto accessories and light industrial sectors, and micro enterprise sector. I’m doing it.
The company has a network of 164 branches, separated into two vertical branches. Prime branches located in metropolitan areas, tier 1 cities and tier 2 cities with customer turnover in the range of 1 billion to 1.5 billion, and micro branches located in tier 3 to 2. Six cities have customer turnover of less than Rs 1 billion. This will help PAN increase the company’s presence in India.
UGRO Capital NCD – October 2024 issue details
| Issues in issue | October 10, 24 |
| problem is closed | October 23, 2024 |
| Issued securities name | UGRO Capital Limited |
| Type of security | Secure, redeemable and non-convertible NCDs |
| Publication size (base) | 100 million rupees |
| Publish size (option to keep beyond subscription) | 100 million rupees |
| Total issue size | 200 million rupees |
| Issue price | 1,000 rupees per deposit |
| face value | 1,000 rupees per deposit |
| series | Ⅰ～Ⅲ |
| minimum lot size | 10 bonds and then 1 bond |
| tenure | 18, 24, 30 months |
| Interest payment frequency | monthly |
| Listed | Within 6 business days for BSE/NSE |
| lead manager | TIPSONS CONSULTING SERVICES PRIVATE LIMITED. |
| bond trustee | Mitcon Credencia Trusteeship Services Limited |
What is the interest rate on UGRO Capital NCD?
| series | Series 1 | Series 2 | series 3 |
|---|---|---|---|
| Interest payment frequency | monthly | monthly | monthly |
| Period of employment (months) | 18 | twenty four | 30 |
| Coupon (% per year) | 10.15% | 10.25% | 10.40% |
| Effective yield (%/year) | 10.64% | 10.75% | 10.91% |
| Amount at maturity (Rs.) | 1,000 | 1,000 | 1,000 |
What is UGRO Capital NCD’s rating?
These secured NCDs are rated IND A+/Stable by India Ratings & Research Private Limited, indicating that securities with this rating are considered to be sufficiently secure with respect to timely fulfillment of financial obligations. Masu. Such securities have low credit risk.
company finances
| Period ends | March 31, 22 | March 31, 23 | March 31, 24 |
|---|---|---|---|
| assets | 2,854.23 | 4,305.59 | 6,279.98 |
| revenue | 313.42 | 683.76 | 1,081.68 |
| Profit after tax | 14.55 | 39.78 | 119.34 |
Why invest in UGRO Capital NCD?
- These NCDs offer high interest rates ranging from 10.15% to 10.4% with yields ranging from 10.64% to 10.91%.
- These are secure NCDs. If the company closes down or goes into financial trouble for any reason, NCD investors have priority repayment of the capital and interest backed by the company’s assets. Therefore, it is safe to invest in safe NCDs. However, it does not eliminate 100% risk.
- In recent years, corporate profit margins have been improving year by year.
Interested in investing in UGRO Capital NCD?
The risk factors for investing in these non-convertible bonds include:
- Although these are secured NCDs, there is no guarantee that NCD investors will get 100% of their principal and interest if the company goes into liquidation for any reason. As an example, the previous DHFL came with a secure NCD. They went bankrupt and NCD investors have not yet received their full principal amount. Investing in NBFC NCDs is riskier.
- A high number of customer defaults or delays in loan repayments could adversely affect our business.
- We may not be able to collect on a timely basis, or at all, the full amount of the Collateral, or an amount sufficient to cover any outstanding amount due to a default, or the value of the Collateral may decline; In that case, our business results may be adversely affected. Management, cash flow, and financial status.
- Its assets under management consist of unsecured loans. If we are unable to collect on a timely basis the amounts due from our customers in connection with such financing, our business and profits could be adversely affected.
- A company’s financial performance is particularly sensitive to changes in interest rates.
- Its business operations involve dealing with borrowers with relatively high risk profiles and limited access to credit. Defaults from such customers could adversely affect its business.
- This business requires significant capital, and any disruption to our funding sources could have a material adverse effect on our liquidity and financial condition.
- Please refer to UGRO Capital NCD October 24 Prospectus Addresses complete risk factors.
Should you invest in UGRO Capital NCD – October 2024 issue?
- UGRO Capital currently offers secure NCDs. These NCDs offer high interest rates of up to 10.4%. These NCDs have a good credit rating of IND A+/Stable by India Ratings & Research Private Limited.
- On the other hand, you need to understand the risks involved in investing in NCD bonds of NBFC companies. In the past, NBFC companies have delayed or defaulted on interest payments and capital repayments.
High-risk investors can invest in these NCD bonds after understanding all these risk factors.
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified – Investment Advisor and a NISM Certified – Research Analyst. I have been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
