Sakthi Finance is currently coming up with a secured NCD bond that can double investors’ money in 85 months. The offering of these notes will begin on February 8, 2024 and close on February 21, 2024. Sakthi Finance is an investment and credit company focused on financing used commercial vehicles. Sakthi Finance NCDs have interest rates up to 10.25% and yields up to 14.3%. These NCDs are offered with tenures ranging from 24 months to 85 months. Interest is paid either monthly or on maturity depending on the NCD option. Should you invest in Sakthi Finance NCD February 2024 issue? What are the risk factors to consider before investing in Sakthi Finance NCD 2024?
About Sakthi Finance Limited
The company is an investment and credit company whose primary business is financing used commercial vehicles.
We also provide financing for the purchase of infrastructure construction equipment, utility vehicles, cars, jeeps and other machinery. The funds provided are secured by a lien on the property financed. The company’s target customers are mainly small and medium-sized road transport operators, primarily from rural/semi-urban areas. SRTOs/MRTOs seek fast processing of funds at competitive rates. The company has identified this opportunity and positioned itself between the organized banking sector and local money lenders by providing flexible and quick loan services to customers and offering loans at competitive interest rates. I made it.
Sakthi Finance NCD – February 2024 – Issue Details
| Subscription start date | February 8, 24 |
| Subscription end date | February 21, 24 |
| Issued securities name | Sakthi Finance Limited |
| Type of security | Safe redeemable non-convertible bonds |
| Publication size (base) | 100 million rupees |
| Publish size (option to keep beyond subscription) | 100 million rupees |
| Total publication size | 200 million rupees |
| Issue price | 1,000 rupees per deposit |
| face value | 1,000 rupees per deposit |
| series | I-VIII |
| minimum lot size | 10 bonds and then 1 bond |
| tenure | 24, 36, 60, 85 months |
| Interest payment frequency | Monthly and cumulative |
| Listed | Within 6 business days for BSE/NSE |
| lead manager | Bonanza Portfolio Limited |
| bond trustee | Catalyst Trusteeship Limited |
Sakthi Finance NCD – February 2024 – Interest Rates
| series | I | II | Ⅲ | Ⅳ | V | VI | VII |
|---|---|---|---|---|---|---|---|
| Interest payment frequency | monthly | cumulative | monthly | cumulative | monthly | cumulative | cumulative |
| Period of employment (months) | twenty four | twenty four | 36 | 36 | 60 | 60 | 85 |
| Coupon (% per year) | 9.00% | N.A. | 9.25% | N.A. | 10.25% | N.A. | N.A. |
| Effective yield (%/year) | 9.00% | 9.74% | 9.25% | 10.52% | 10.25% | 13.17% | 14.30% |
| Amount at maturity (Rs.) | 1,000.00 | 1,194.83 | 1,000.00 | 1,315.66 | 1,000.00 | 1,658.72 | 2,013.13 |
Sakthi Finance NCD – February 2024 – Credit Rating
ICRA has assigned Sakthi Finance NCD rating to BBB (stable). Products with this rating are considered to have moderate security with respect to timely repayment of financial obligations. Such products involve moderate credit risk.
What about the company’s profits?
The profit is as follows.
- FY2020 – 111.7 billion rupees
- FY2021 – Rs 9.25 billion
- FY2022 – 9 billion rupees
- FY2023 – 12 billion rupees
Sakthi Finance NCD – Why invest in February 2024?
- Sakthi Finance NCD offers attractive interest rates where investors can earn interest rates of up to 10.25% and yields of up to 14.3%.
- Sakthi Finance’s profits have fluctuated a bit, but they have been consistent. Investing in companies that generate stable profits reduces the risk of default.
- Issue a secure NCD. If a company liquidates/goes out of business for any reason, secure NCD investors have priority 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.
Published by Sakthi Finance NCD – Want to invest in February 2024?
- Sakthi Finance NCD’s credit rating is BBB (stable) by ICRA, which is considered a poor rating. Companies with credit ratings below an ‘A’ rating are more likely to default on payments in the future.
- Sakthi Finance operates in the highly competitive financial services industry, where there is significant pricing pressure, negatively impacting margins and revenues.
- We are involved in certain legal and other proceedings, and an adverse judgment in these proceedings could have a material adverse financial impact.
- One of the promoter’s group companies defaulted on interest and principal payments to one of its creditors. Adverse actions taken or scheduled to be taken by creditors may affect the financial position of its promoters and the company.
- The company faces other challenges, including disruptions in its sources of financing, inability to obtain or maintain statutory or regulatory approvals to conduct business, the performance of India’s debt and equity markets, and rising levels of NPAs impacting its operations. There are also risk factors.
- Please refer to the NCD prospectus for complete risk factors.
Sakthi Finance NCD – Should I invest in February 2024?
- The next issue of Sakthi Finance NCD has high interest rate and high yield. Although banks are offering higher FD interest rates these days, these NCDs still offer interest rates of up to 10.25% and yields of up to 14.3%. Investor’s money doubles in 85 months. The company also earns stable margins and these NCDs are also secured.
- On the other hand, these NCDs are rated BBB (stable) by ICRA, which is considered a low rating.
These NCD bonds are high risk. If investors are willing to consider all these risks, they can invest in these bonds, but if not, they can be avoided.
sauce: Sakthi Finance February 2024 NCD Issued Prospectus from SEBI
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. He has been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
