Navi Finserv is currently devising a collateralized NCD bond. These notes will be offered for sale on February 26, 2024. Navi Finserv is a non-deposit-taking systemically important NBFC registered with the RBI. Navi Finserv NCD offers interest rates up to 11.19%. These NCDs are offered in 18-month, 27-month, and 36-month tenures. Interest is paid monthly or annually. Should I invest in Navi Finserv NCD February 2024? Is investing in Navi Finserv NCD safe or risky?
About Navi Finserv Limited
The company is a non-deposit-taking systemically important NBFC registered with the RBI and a wholly-owned subsidiary of NTL.
NTL is an Indian technology-driven financial products and services company focused on India’s young, digitally connected middle class population.
The company offers personal loans, home loans and other financing products under the Navi brand.
It also provides microfinance loans under the brand name ‘chaitanya’ through its subsidiary CIFCPL.
Navi Finserv NCD February 2024 issue details
Details of Navi Finserv NCD February 2024 issue.
| Subscription start date | February 26, 24 |
| Subscription end date | March 7, 24 |
| Issued securities name | Navi Finserv Limited |
| Type of security | Secured, redeemable, non-convertible debentures (Secured NCDs) |
| Publication size (base) | 300 million rupees |
| Publish size (option to keep beyond subscription) | 300 million rupees |
| Total issue size | 600 million rupees |
| Issue price | 1,000 rupees per deposit |
| face value | 1,000 rupees per deposit |
| minimum lot size | 10 bonds and then 1 bond |
| tenure | 18, 27, 36 months |
| Interest payment frequency | monthly and yearly |
| Listed | Within 6 business days for BSE/NSE |
| lead manager | JM Financial Limited |
| bond trustee | Catalyst Trusteeship Limited |
NRIs are not eligible for this NCD subscription.
Navi Finserv NCD Interest Rate – February 2024 issue
| series | I | II | Ⅲ | Ⅳ | X |
|---|---|---|---|---|---|
| Interest payment frequency | monthly | monthly | yearly | monthly | yearly |
| tenor (monthly) | 18 | 27 | 27 | 36 | 36 |
| Coupon (% per year) | 10.00% | 10.40% | 10.90% | 10.65% | 11.19% |
| Effective yield (%/year) | 10.47% | 10.91% | 10.94% | 11.19% | 11.19% |
| Amount at maturity (Rs.) | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 |
What are the credit ratings of these NCDs?
CRISIL Rating Assignment Navi Finserv NCD Evaluation As CRISIL A/stable. Products with this rating are considered to be sufficiently secure to meet financial obligations in a timely manner. The credit risk of such products is low.
What about the company’s profits?
The company’s adjusted consolidated profit is as follows.
- FY21 – 118.1 million rupees
- FY2022 – 146.6 billion rupees (loss)
- FY2023 – 264.1 million rupees
Why invest in these NCDs?
- Navi Finserv NCD offers attractive interest rates where investors can earn up to 11.19% interest.
- Issue a secure NCD. A secured NCD is safer compared to an unsecured NCD. If the company is liquidated/closed for any reason, secure NCD investors will have preferential repayment of their capital along with interest as it is backed by the company’s assets. Therefore, it is safe to invest in such safe NCD options.
Would you like to invest in these NCD bonds?
Risk factors that investors should consider before investing in these bonds include:
- The company suffered a loss in FY22. Investors should always invest in commercial enterprises so that they can receive interest payments and repayment of capital in a timely manner.
- Corporate lending businesses and microfinance business operations rely intensively on large amounts of capital for lending and microfinance business operations.Disruptions can affect a company’s financial position and liquidity
- Both our lending and treasury operations are affected by changes in interest rates, which can fluctuate our net interest income and impact our profitability.
- Although the company has experienced significant growth recently, it may not be able to grow at a similar pace or manage it effectively in the future.
- If a customer defaults on their repayment obligations, it could have a negative impact on the company.
- The coronavirus pandemic has impacted, and may continue to impact, normal business operations.
- refer Navi Finserv February 24th NCD Prospectus Addresses complete risk factors.
How safe are Navi Finserv NCD bonds?
These NCD bonds are rated A/Stable by Crisil Ratings. Such a rating is considered to provide sufficient security regarding the timely repayment of financial obligations with low credit risk. Therefore, these are safe joins.
Should you invest in Navi Finserv NCD February 2024 issue?
- These NCD bonds offer high interest rates and yields. Such interest rates are higher than the FD interest rates offered by small finance banks. It has an A/Stable credit rating, which is considered to be sufficiently secure and poses low credit risk. These are also secure NCDs.
- On the other hand, investing in these bonds involves several risk factors. A company’s credit rating may change in the future without prior notice. Although the company suffered losses in FY22, it showed significant improvement in both revenue and profit.
Investors who understand all these risk factors can invest in such NCDs.
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. I have been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
