IIFL Samasta NCD June 2024 Issue – Introduction
IIFL Samasta Finance Ltd (formerly Samasta Microfinance Ltd) has issued secured NCDs for which subscription will open on June 3, 2024. IIFL Samasta Finance Limited is an Indian NBFC and Microfinance Institution. These NCDs offer interest rates up to 10.5% and will be issued in six different series with tenors ranging from 24 to 60 months. IIFL Samasta NCD June 2024 issueWhat are the risk factors to consider before investing in such high-risk NCDs?
About IIFL Samasta Finance Limited
We are a systemically important non-banking financial company, a microfinance institution in India.
The organisation provides innovative and affordable financial products to women from unbanked sections of society such as cultivators, agricultural labourers, vegetable and flower sellers, fabric traders, tailors, artisans, domestic workers and industrial workers in rural, semi-urban and urban India, enrolled as members and organised into Joint Liability Groups (JLGs).
We are a subsidiary of IIFL Finance Limited. We offer a wide range of loans to underprivileged individuals who do not have access to traditional banking services, including income generation loans, top-up loans, property secured loans, micro enterprise loans, lifestyle and family welfare loans such as dairy cow loans, purchase of everyday items such as sanitation fixtures, cookstoves, water purifiers, solar lights, mobile phones and other life enhancing products.
In addition to financial services, the company also offers non-financial services such as life insurance, health insurance, financial counselling etc., ensuring comprehensive support to its valued clients.The average borrowing cost for the financial year 2023 and for the six months ended September 30, 2023 was 9.98% and 10.49%, respectively.
IIFL Samasta NCD June 2024 – Issue Details
Details of IIFL Samasta NCD Tranche-II issue are as follows:
Application start date | June 3, 2024 |
Subscription End Date | June 14, 2024 |
Name of Issuer | IIFL Samasta Finance Limited |
Security Type | Secured Redeemable Non-Convertible Debentures (Secured NCDs) |
Issue size (base) | 200 crore |
Issue size (option to hold oversubscribed amounts) | 800 billion rupees |
Total Issue Amount | 1,000 crores |
Issue price | 1,000 per bond. |
Face value | 1,000 per bond. |
series | Series I to VI |
Minimum Lot Size | 10 bonds and then 1 bond |
Tenure | 24, 36, 60 months |
Interest payment frequency | Monthly and Yearly |
Listing | Within 6 business days on BSE |
Lead Manager | IIFL Securities Co., Ltd. Nvama Wealth Trust Investment Advisors |
Bond Trustee | Beacon Trusteeship Co., Ltd. |
IIFL Samasta NCD June 2024 – Interest Rates
The interest rates are as follows: No additional interest will be payable to employees and existing members/subscribers on previous NCD issues.
series | I | II | III. | IV | Five | VI |
---|---|---|---|---|---|---|
Frequency of interest payments | Monthly | Annual | Monthly | Annual | Monthly | Annual |
Term of employment (months) | twenty four | twenty four | 36 | 36 | 60 | 60 |
Coupon (annual interest rate) | 9.20% | 9.60% | 9.57% | 10.00% | 10.03% | 10.50% |
Effective Yield (annual %) | 9.60% | 9.60% | 10.00% | 10.00% | 10.50% | 10.49% |
Amount at maturity (Rupees) | 1,000.00 | 1,000.00 | 1,000.00 | 1,000.00 | 1,000.00 | 1,000.00 |
IIFL Samasta NCD June 2024 – Credit Rating
The credit ratings of these NCDs are as follows:
- CRISIL AA-/ Developing (Maintained on “Watch with Developing Implications”)
- “Acuite AA | Negative Rating Watch Impact” by Acuite Ratings and Research Limited.
These ratings indicate that financial instruments bearing this rating have a high degree of security with regard to the timely performance of financial obligations and are considered to have very low credit risk.Investors should note that no credit ratings in the past six months have been marked with the words “Caution” or “Developing”.
IIFL Samasta Finance Limited – Profit
The benefits are:
- FY ending March 2022 – Rs 5,061 crore
- FY ending March 2023 – INR 1,281.7 million
- FY ending March 2024 – INR 503.04 billion
IIFL Samasta NCD June 2024 – Why Invest?
- These NCDs offer attractive interest rates of up to 10.5% and a yield of up to 10.5% per annum. Currently, banks and financial institutions are offering relatively low interest rates, making these NCDs an attractive investment option.
- The company has delivered good earnings margin growth in the past, and investors may want to consider NCDs from companies with growing earnings margins.
- These NCDs are offered in six different series, giving investors the flexibility to invest in the option that suits them.
IIFL Samasta NCD June 2024 – Risk Factors
Risk factors when investing in these bonds include:
- A downgrade in our credit ratings could increase our borrowing costs, adversely affecting our net interest margins and overall operating results.
- Rising non-performing assets (NPAs) in the loan portfolio could adversely impact the company’s business.
- Certain conditions and restrictions in our financing agreements may limit our ability to conduct our business and operations.
- Fluctuations in interest rates could have a material adverse effect on net interest income.
- Investors are advised to refer to the following: IIFL Samasta NCD June 2024 RHP Prospectus To fully understand your risk factors.
IIFL Samasta NCD June 2024 – Should You Invest or Avoid?
- IIFL Samasta NCD June 2024 Tranche II offers high interest rates of up to 10.5%, which is higher compared to FDs offered by banks and FDs and NCDs offered by financial institutions. Secured NCDs offer a degree of safety compared to unsecured NCDs. They are rated AA by CRISIL and Acuite Ratings and are considered to have a good credit rating.
- On the downside, the credit rating may change in the future. Investors should not forget NBFCs that have defaulted on payments in the past. Some NBFCs have also delayed interest payments and principal repayments.
High risk investors who understand all these risk factors may invest in such NCDs.
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