Nido Home Finance Limited will launch secured NCD with maximum interest rate of 11% on December 17, 2024. Here is a detailed review to help you decide whether to invest or not.
About Nido Home Finance Co., Ltd.
The company is a no deposit required housing finance company focused on providing secured loan products tailored to individual needs, including small ticket loans to customers in the affordable housing category.
They are part of Edelweiss Group, India’s leading diversified financial services group. Nido Home Finance Limited was previously known as Edelweiss Housing Finance Limited.
They offer their customers a variety of mortgage-related loan products, including:
mortgage loanThis includes providing secured loans to salaried earners, self-employed people, and others for the purchase/construction/renovation of residential property, secured by a mortgage on the same property. As of March 31, 2023, they accounted for 56.97% and 63.95% of the loan book. 61.34% of the loan book as of March 31, 2024 and 61.34% of the loan book as of June 30, 2024.
Non-mortgage loans including real estate secured loans (LAP)is an unencumbered real estate loan facility primarily provided to self-employed individuals, with end use for working capital, property purchases, or other purposes. As part of the LAP, lease rental discounts are also offered if the lessee is a corporate entity.
construction finance, A financing facility provided to real estate developers for the construction costs of housing projects. Loans are made against real estate collateral, with or without other collateral. Loan disbursements are related to construction.
Nido Home Finance NCD – December 2024 – Issue Details
| Subscription start date | December 17, 24 |
| Subscription end date | December 31, 2024 |
| Issued securities name | Nido Home Finance Co., Ltd. |
| Type of security | Secured, redeemable, non-convertible debentures (Secured NCDs) |
| Publication size (base) | 5 billion rupees |
| Publish size (option to keep beyond subscription) | 5 billion rupees |
| Total issue size | 100 million rupees |
| Issue price | 1,000 rupees per deposit |
| face value | 1,000 rupees per security deposit |
| series | from me to x |
| minimum lot size | 10 bonds and then 1 bond |
| tenure | 24, 36, 60, 120 months |
| Interest payment frequency | monthly, annually, or per maturity |
| Listed | Within 6 business days for BSE |
| lead manager | Tipsons Consulting Services Private Limited Nuvama Wealth Management Limited |
| bond trustee | BEACON TRUSTEESHIP LIMITED. |
Nido Home Finance NCD – December 2024 – Interest Rates
| series | I | II | Ⅲ | Ⅳ | V | VI | VII | VIII | IX | × |
|---|---|---|---|---|---|---|---|---|---|---|
| Interest payment frequency | yearly | cumulative | monthly | yearly | cumulative | monthly | yearly | cumulative | monthly | yearly |
| Period of employment (months) | twenty four | twenty four | 36 | 36 | 36 | 60 | 60 | 60 | 120 | 120 |
| Coupon (% per year) | 9.50% | N.A. | 9.58% | 10.00% | N.A. | 10.03% | 10.50% | N.A. | 10.49% | 11.00% |
| Effective yield (%/year) | 9.50% | 9.50% | 10.01% | 10.00% | 10.00% | 10.50% | 10.49% | 10.50% | 11.00% | 10.99% |
| Amount at maturity (Rs.) | 1,000.00 | 1,191.13 | 1,000.00 | 1,000.00 | 1,331.18 | 1,000* | 1,000* | 1,648.27 | 1,000** | 1,000** |
*Gradual redemption in 2 annual payments of ₹500 each from 4th anniversary to maturity
**Gradual redemption in 5 annual payments of ₹200 each from 6th anniversary to maturity
Nido Home Finance NCD – December 2024 – Credit Rating
CRISIL Ratings has assigned Nido Home Finance NCD a rating of CRISIL A+/Watch Negative. Securities with this rating are considered to have sufficient security with respect to the timely repayment of financial obligations. The credit risk of such securities is low.
What about the company’s profits?
The profit is as follows.
- FY2021 – 3.72 billion rupees
- FY2022 – 13.8 billion rupees
- FY2023 – 1,606 billion rupees
- FY2024 – 19.3 billion rupees
Nido Home Finance NCD – Why invest in December 2024?
- Nido Home Finance NCD offers attractive interest rates where investors can earn up to 11% interest per annum.
- The company generates stable profits. Investors should always invest in companies that are growing and generating stable profits.
- Issue a secure NCD. If a company closes down for any reason, a secure NCD investor can secure priority repayment of capital and interest using the company’s assets as collateral. Therefore, it is safe to invest in such safe NCD options.
Nido Home Finance NCD – Want to invest in December 2024?
- As we are an HFC, we are subject to various regulations and laws. Additionally, future regulatory changes could have a material adverse effect on our business.
- Our business requires significant capital, and any disruption to our funding sources could adversely affect our business.
- Any negative events that adversely affect the Indian real estate sector could adversely affect the value of our loan collateral, our business and our results of operations.
- Increased levels of non-performing assets for any reason may have an adverse effect on its business.
- These companies may face asset-liability mismatches, which may affect their liquidity and, as a result, adversely affect their operations and financial performance.
- refer Nido Home Finance NCD December 24th Prospectus Link to complete risk factors.
Nido Home Finance NCD – Should I invest in December 2024?
Currently issued Nido Home Finance NCDs have high interest rates and high yields. Even though even small finance banks are offering high FD interest rates these days, these NCDs remain attractive and offer interest rates of up to 11%. The company also earns stable margins and these NCDs are also secured.
On the other hand, investors should not forget the risks associated with investing in NBFC bonds. Previously, many NBFCs defaulted on their debts, resulting in delays in repayment of principal and interest. There is also a series of this NCD issue where the principal is repaid in installments. This means that you will receive the capital amount in installments.
Investors should also consider CRISIL A+/Watch Negative’s credit rating, which indicates adequate safety but caution.
These NCDs are ideal for high-risk investors who are looking for higher yields than FDs but are willing to accept the risks associated with NBFC bonds.
