KLM Axiva Finvest is planning a secured NCD issue with subscriptions opening on 22 July 2024. KLM Axiva Finvest is a systemically important non-deposit taking NBFC in India. KLM Axiva Finvest NCD interest rates up to 10.75% and yields up to 11.3%. Your money will double in 79 months. Should you invest in the KLM Axiva Finvest NCD issue in July 2024? What are the risk factors to consider before investing in KLM Axiva NCD 2024 issue? We would like to provide you with a complete review of these NCD bonds.
About KLM Axiva Finvest Limited
The company does not accept deposits and is a systemically important non-banking financial company that primarily serves low- and moderate-income individuals and businesses that have limited or no access to formal banking and financial channels. The company operates primarily through four business segments:
(i) Money lending business, lending money against household goods as security
(ii) Lending to Small and Medium Enterprises
(iii) Personal loans and
(iv) Microfinance lending to women clients.
KLM Axiva Finvest NCD – July 2024 issue detail
| Application start date | July 22, 2024 |
| Subscription End Date | August 2, 2024 |
| Name of Issuer | KLM Axiba Finvest Limited |
| Security Type | Secured redeemable and non-convertible NCDs |
| Issue size (base) | 75 million rupees |
| Issue size (option to hold beyond subscription) | 75 million rupees |
| Total Issue Amount | 150 crore |
| Issue price | 1,000 per bond. |
| Face value | 1,000 per bond. |
| series | From I to X |
| Minimum Lot Size | Five bonds followed by one |
| Tenure | 400 days, 16, 18, 79 months, 2, 3, 5 years |
| Interest payment frequency | Monthly, Annual, Maturity Date |
| Published in | Within 6 business days on BSE |
| Lead Manager | Vibro Financial Services Private Limited |
| Bond Trustee | Vistra ITCL (India) Limited |
KLM Axiva Finvest NCD July 2024 – Interest Rate
| series | I | II | III. | IV | Five | VI | Seven | Eight | Chapter 9 | X |
|---|---|---|---|---|---|---|---|---|---|---|
| Frequency of interest payments | Monthly | Cumulative | Monthly | Monthly | Annual | Monthly | Annual | Monthly | Annual | Cumulative |
| Tenure | 400 days | 16 months | 18 months | 2 years | 2 years | 3 years | 3 years | 5 years | 5 years | 79 months |
| Coupon (annual interest rate) | 9.50% | N/A | 9.85% | 10.00% | 10.25% | 10.25% | 10.25% | 10.75% | 11.00% | N/A |
| Effective Yield (annual %) | 9.92% | 9.96% | 10.31% | 10.47% | 10.25% | 10.75% | 10.50% | 11.30% | 11.00% | 11.10% |
| Amount at maturity (Rupees) | 1,000 | N/A | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 2,000 |
KLM Axiva Finvest NCD July 2024 – Rating
The secured NCDs are rated BBB-/Stable by India Ratings and Research and ACUITE BBB by Acuite Ratings and Research Limited.
The NCD rating indicates that financial instruments with this rating are considered to be moderately secure with regard to timely performance of financial obligations and entail moderate credit risk.
KLM Axiva Finvest NCD July 2024 – Are these secured NCD bonds?
These are senior notes, which means that, subject to applicable statutory and/or regulatory requirements, the claims of debenture holders holding NCDs have priority over the claims of unsecured creditors.
The NCDs constitute secured indebtedness of the Company and give rise to a first-lien security interest, pari passu with existing secured creditors, over all of the Company’s present and future book indebtedness and personal property, including accounts receivable, cash and bank balances, other personal property, loans and advances, equal to one times the value of the outstanding NCDs plus interest thereon.
What is the company’s profit situation?
The profits are as follows:
- FY2020 – Rs 5.06 crore
- FY2021 – Rs 7,058,000 crore
- FY ending March 2022 – Rs 1,138.3 million
- FY ending March 2023 – Rs 1,833.1 million
- FY ending March 2024 – Rs 2,302.8 million
KLM Axiva Finvest NCD July 2024 – Why invest?
- These NCDs offer attractive interest rates of up to 10.75% and yields of up to 11.3%.
- The company has been steadily profitable over the last few years and its profit margins have also improved.You should always invest in stable, growing companies with good financial standing that make repayments to their NCD investors on time without any delay.
- The company issues secured NCDs. In case the company performs poorly and is closed down for any reason, the NCD investors get priority in repayment of their capital along with interest. Hence, it is safe to invest in such secured NCD options. However, only priority is given to the NCD investors and there is no guarantee that the full amount will be repaid in such cases.
KLM Axiva Finvest NCD July 2024 – Why not invest?
- The Company has received a show cause notice from the RBI and any adverse action taken may impact the Company’s operations.
- These companies are subject to regulatory oversight and if they do not comply with observations made by regulators during routine inspections, they may be subject to penalties and restrictions, which may affect their business and operations.
- The Company, its promoters and directors and other companies have been subject to searches and seizures by the income tax authorities of India.
- The Company’s financial performance is particularly sensitive to changes in interest rates.
- High levels of customer default rates or late loan payments could have an adverse effect on our business.
- If we are unable to control the level of non-performing loans in our loan assets, our financial condition and results of operations may be adversely affected.
- Investors should refer to the other internal and external factors set out in this report. KLM Axiba Finvest July 2024 NCD Prospectus.
How to apply for KLM Axiva Finvest NCD July 2024 issue?
KLM Axiva Finvest NCD issue is available only in demat form. You can apply online or through the website of the broker where you hold your demat account. The complete form can be downloaded from the lead manager’s website. Please refer to the prospectus for more details.
Is the KLM Axiva NCD safe?
KLM Axiva NCD is rated IND BBB-/Stable by IND Ratings and ACUITE BBB by Acuite Ratings. NCD bonds with such ratings are considered high risk.
KLM Axiva Finvest NCD July 2024 Bond – Review and Conclusion
- KLM Axiva Finvest is offering secured NCDs as part of its July 2024 issue. These have higher interest rates, up to 10.75%, with yields of up to 11.3%. These are also secured NCDs.
- On the other hand, these bonds are high risk as they have been given low credit ratings of BBB- Stable by IND Ratings and Acuite Ratings. If such NBFC companies run into financial distress, their capital may be at risk. Don’t forget the earlier DHFL crisis and delays in repaying principal capital to NCD investors by many NBFC companies.
Investors may steer clear of such high-risk NCDs for now.
Suresh KP is the Founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and NISM Certified Research Analyst. He has been involved in analyzing financial markets for the last 20 years. He can be reached at suresh@myinvestmentideas.com.
