Cholamandalam Investments and Finance NCD November 2023 – Introduction
Cholamandalam Investment and Finance’s NCD issuance is scheduled to commence on November 28, 2023. Cholamandalam Finance offers auto loans, home loans, small business loans, and more. The company offers NCDs with periods of 24 months, 36 months, and 60 months.Should you invest in Cholamandalam Investment and Finance NCD November 2023/December 2023What are the risk factors to consider before investing in Cholamandalam NCD 2023?
Also read: List of mutual funds to invest in to make 1 billion in 10 years
About Cholamandalam Investment and Finance Limited
Cholamandalam Investment and Finance Company Limited is part of the Murugappa Group and offers a wide range of financial services including vehicle finance, home loans, home equity loans, small business loans, investment advisory services and stock broking.
Cholamandalam Finance has over 1,166 branches across India and assets under management (AUM) of over Rs 1,03,789 crore.Serving over 21 million customers across India
Cholamandalam Investment and Finance NCD November 2023 Issue Details
Cholamandalam Investment Tranche III November 2023 NCD issuance details are as follows:
| Subscription start date | November 28, 23 |
| Subscription end date | December 11, 2023 |
| Issued securities name | Cholamandalam Investment and Finance Company Limited |
| Type of security | Secured, redeemable, non-convertible debentures (Secured NCDs) |
| Publication size (base) | 500 million rupees |
| Publish size (option to keep beyond subscription) | 500 million rupees |
| Total issue size | 1 billion rupees |
| Issue price | 1,000 rupees per deposit |
| face value | 1,000 rupees per deposit |
| series | Series I-VI |
| minimum lot size | 10 bonds and then 1 bond |
| tenure | 24, 36, 60 months |
| Interest payment frequency | Annual and cumulative |
| Listed | Within 6 business days for BSE |
| lead manager | AK Capital Services Limited |
| bond trustee | IDBI Trusteeship Services Ltd. |
Cholamandalam Investment and Finance NCD November 2023 – Interest Rates
| series | I | II | Ⅲ | Ⅳ | V | VI |
|---|---|---|---|---|---|---|
| Interest payment frequency | yearly | cumulative | yearly | cumulative | yearly | cumulative |
| Tenure (months) | twenty four | twenty four | 36 | 36 | 60 | 60 |
| Coupon (% per year) | 8.40% | N.A. | 8.50% | N.A. | 8.60% | N.A. |
| Effective yield (%/year) | 8.39% | 8.40% | 8.49% | 8.50% | 8.59% | 8.60% |
| Amount at maturity (Rs.) | 1,000.00 | 1,175.32 | 1,000.00 | 1,277.58 | 1,000.00 | 1,511.28 |
NCD evaluation
Cholamandalam Investment NCD is rated as follows. [ICRA] AA+/Stable by ICRA Limited and IND AA+/Stable by India Ratings and Research.
- Securities with this rating are considered to have sufficient security with respect to the timely fulfillment of financial obligations.
- Such securities have low credit risk.
- Investors should understand that these NCD credit ratings may change in the future.
What about the company’s profits?
Consolidated profit is as follows.
- FY2020 – 1,054 million rupees
- FY21 – 1,521 million rupees
- FY2022 – 2,158 million rupees
- FY2023 – 2,676 million rupees
Cholamandalam Investment and Finance NCD November 2023 – Why invest?
- These NCDs offer competitive interest rates of up to 8.6% per annum.
- The company’s profit margin has been improving year by year, reducing default risk for NCD investors.
- These are secure NCDs. I always advise investors to consider collateralized NCDs. This is because even if the company is liquidated or closed for any reason, investors will still receive preferential treatment in the repayment of capital.
Also read: ICL Fincorp NCD November 2023 issue interest rate is 12.5%
Cholamandalam Investment and Finance NCD November 2023 – Risk factor
- SFB Bank currently offers similar interest rates. Therefore, his NCD issue of Cholamandalam Investment and Finance may not be so attractive.
- The company may face disruption in its funding sources, which could affect its growth.
- The company’s growth prospects will depend on the overall demand for the Indian automobile market, particularly for LCVs, HCVs, passenger cars and MUVs. Any downward trend in these segments could impact the company’s performance.
- Changes in interest rates and other market conditions could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.
- Please refer to. Cholamandalam NCD November 2023 NCD Prospectus Addresses complete risk factors.
Cholamandalam Investments and Finance NCD November 2023 – To invest or avoid?
Cholamandalam Investment and Finance NCD issue offers high interest rates. These NCDs are rated as AA+ by ICRA and Indian Ratings. They offer short to medium term holding period NCDs which are suitable for investment. Additionally, these are secure NCDs.
On the other hand, small finance banks offer similar interest rates on FD schemes. Investing in his NCDs in NBFC companies comes with risks and I always stress that point in these reviews.
High-risk investors who understand all these pros and cons can consider investing in these NCDs.
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 contacted at suresh@myinvestmentideas.com.
