Motilal Oswal Financial Services intends to issue secured NCD bonds with subscription commencing on April 23, 2024. Motilal Oswal Financial Services Limited is a full-service broker in India with the highest total brokerage revenue as of March 31, 2023. We offer interest rates of up to 9.7%. These NCDs are issued in eight different series and have a validity period of 24 to 120 months. Interest is paid monthly, annually, or cumulatively depending on the series selected. Should you invest in Motilal Oswal Financial Services NCD April 2024 issue? What are the risk factors to consider before investing in such high-risk NCDs?
About Motilal Oswal Financial Services Limited
Motilal Oswal Financial Services Limited was incorporated in May 2005.
The company is a full-service broker in India with the highest total brokerage revenue of any company in the brokerage industry as of March 31, 2023.
The Group provides financial services including brokerage, investment banking, asset management, private equity, wealth management and housing finance.
Motilal Oswal Financial Services NCD – Issued April 2024 Details
| Subscription start date | April 23, 24 |
| Subscription end date | May 7, 24 |
| Issued securities name | Motilal Oswal Financial Services 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-VIII |
| minimum lot size | 10 bonds and then 1 bond |
| tenure | 24, 36, 60, 120 months |
| Interest payment frequency | monthly and yearly |
| Listed | Within 6 business days for BSE |
| lead manager | Trust Investment Advisors Private Limited Motilal Oswal Investment Advisors Limited Nuvama Wealth Management Limited |
| bond trustee | BEACON TRUSTEESHIP LIMITED. |
Motilal Oswal Financial Services NCD April 2024 Prospectus
What is Motilal Oswal Financial Services NCD interest rate?
| option | I | II | Ⅲ | Ⅳ | V | VI | VII | VIII |
|---|---|---|---|---|---|---|---|---|
| Interest payment frequency | yearly | cumulative | yearly | cumulative | monthly | yearly | monthly | yearly |
| Tenure (months) | twenty four | twenty four | 36 | 36 | 60 | 60 | 120 | 120 |
| Coupon (% per year) | 8.85% | N.A. | 9.10% | N.A. | 8.97% | 9.35% | 9.30% | 9.70% |
| Effective yield (%/year) | 8.85% | 8.85% | 9.10% | 9.10% | 9.35% | 9.35% | 9.70% | 9.70% |
| Amount at maturity (Rs.) | 1,000.00 | 1,184.85 | 1,000.00 | 1,298.60 | 1,000.00 | 1,000.00 | 1,000.00 | 1,000.00 |
What is the rating of Motilal Oswal Financial Services NCD?
These collateralized NCDs are rated AA-/Stable by CRISIL Ratings and India Ratings and Research Limited, and products with this rating are highly secure with respect to timely repayment of financial obligations and are subject to very low credit risk. indicates that it is considered to be low.
What about the company’s profits?
Consolidated profit is as follows.
- Year ended March 2020 – 21.5 billion yen
- Year ending March 2021 – 119.7 billion yen
- Fiscal year ending March 2022 – 131 billion yen
- Year ending March 2023 – 93.2 billion yen
- Nine months ended December 23 – 171.7 billion yen
Why invest in Motilal Oswal Financial Services NCD?
- These NCDs offer high interest rates ranging from 8.85% to 9.7%.
- These are secure NCDs. If a company closes down or goes into financial trouble for any reason, NCD investors have priority repayment of the capital and interest backed by the company’s assets. Therefore, it is safe to invest in safe NCDs.
- The company has been generating stable profits in recent years.
- The company’s NCDs are rated AA/Stable by CRISIL Ratings and India Ratings and Research. Although such ratings may change in the future, investing in NCDs backed by his NCD bonds with AA rating is always profitable.
Interested in investing in Motilal Oswal Financial Services NCD?
The risk factors for investing in these non-convertible bonds include:
- Corporate compliance: We operate in a highly regulated environment, and changes in laws and regulations could adversely affect our business, finances and operations. Violating regulatory inspections can result in penalties and damage to a company’s reputation.
- IT system risks: The Company’s operations are highly dependent on information technology, making it vulnerable to risks associated with failures or deficiencies in its IT systems.
- Reliance on intermediary services: A significant portion of the company’s revenues and profits come from its brokerage and related services business. Reductions in brokerage fees may adversely affect our financial results.
- Proposed arrangement scheme: The company plans to submit a scheme of arrangement, subject to regulatory approval. However, if the scheme is approved, issues such as litigation involving corporate executives and uncertainty regarding regulatory approval could have an adverse impact on our business, finances and operations.
- Operational risk in the financial services industry: The financial services industry has inherent operational risks that, if realized, could have a material adverse effect on the Company’s business, finances and operations.
- Please refer to the NCD prospectus for complete risk factors.
Should you invest in Motilal Oswal Financial Services NCDs?
- Motilal Oswal Financial Services offers secure NCDs with April 2024 issue. These NCDs offer high interest rates of up to 9.7%. These NCDs have good credit ratings of AA-/Stable by CRISIL and India Ratings and Research.
- On the other hand, you should understand the risks involved in investing in corporate NCD bonds, which are highlighted in the risk factors section.
High-risk investors can invest in these NCD bonds after understanding all these risk factors.
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.
