Kosamattam Finance is currently issuing secured NCD bonds. These bonds have been opened for subscription today. Kosamattam Finance is a leading NBFC company in India. Kosamattam Finance NCDs offer NCD interest rates up to 10.25% and yields up to 10.75%. These NCDs are offered for tenors ranging from 18 to 84 months. These interests can be paid monthly or cumulatively. Should you invest in Kosamattam Finance NCD issue in July 2024?
About Kothamatham Finance Limited
The Company is a systemically important non-deposit taking, non-banking financial company principally engaged in the business of gold lending and provides gold loans against household goods and jewellery in the states of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Delhi, Maharashtra, Gujarat, Telangana and the Union Territory of Puducherry.
Kosamattam Finance NCD – July 2024 Issue Details
Application start date | July 19, 2024 |
Subscription End Date | August 1, 2024 |
Name of Issuer | Kothamatam Finance Limited |
Security Type | Secured Redeemable Non-Convertible Debentures (Secured NCDs) |
Issue size (base) | 100 crore |
Issue size (option to hold oversubscribed amounts) | 100 crore |
Total Issue Amount | 200 crore |
Issue price | 1,000 per bond. |
Face value | 1,000 per bond. |
series | Series I to VIII |
Minimum Lot Size | 10 bonds and then 1 bond |
Tenure | 18, 24, 30, 36, 39, 48, 60, 84 months |
Interest payment frequency | Monthly and cumulative |
Published in | Within 6 business days on BSE |
Lead Manager | SMC Capitals Limited |
Bond Trustee | Vistra Itsel India Limited |
The registrar in question | KFIN Technologies Limited |
Kothamatam Finance NCD – Interest Rates July 2024
option | I | II | III. | IV | Five | VI | Seven | Eight |
---|---|---|---|---|---|---|---|---|
Frequency of interest payments | Cumulative | Monthly | Cumulative | Monthly | Cumulative | Monthly | Cumulative | Cumulative |
Term of employment (months) | 18 | twenty four | 30 | 36 | 39 | 60 | 48 | 84 |
Coupon (annual interest rate) | N/A | 9.25% | N/A | 10.00% | N/A | 10.25% | N/A | N/A |
Effective Yield (annual %) | 9.00% | 9.65% | 9.41% | 10.47% | 9.75% | 10.75% | 10.67% | 10.41% |
Amount at maturity (Rupees) | 1,138.00 | 1,000.00 | 1,252.00 | 1,000.00 | 1,353.00 | 1,000.00 | 1,500.00 | 2,000.00 |
Kosamattam Finance NCD – What is its credit rating as of July 2024?
These NCDs have been rated A-Stable by India Ratings & Research Private Limited, indicating that instruments with this rating are considered to have adequate security with regard to timely performance of financial obligations.Such instruments have low credit risk.
What is the company’s profit situation?
Details of the company’s profits are as follows:
- FY2019 – Rs 431.4 million
- FY2020 – Rs 476.3 million
- FY2021 – Rs 653.1 crore
- FY ending March 2022 – Rs. 800 crore
- FY ending March 2023 – INR 1,070.5 million
- FY ending March 2024 – INR 1,137 million
Reasons to invest in Kosamattam Finance NCD (July 2024)
- These Kosamattam NCDs offer attractive interest rates, allowing investors to earn up to 10.25% interest and up to 10.75% yield per annum.
- Kosamattam Finance generates stable profits, which means the company has the ability to pay interest to NCD holders on time and without any delay.
- The company issues secured NCDs. These NCDs are safer as compared to other unsecured NCDs. In case the company gets dissolved/closed for any reason, investors in secured NCDs get priority in repayment of capital along with interest backed by the assets of the company. Hence, it is safe to invest in such secured NCD options.
- The Company has a credit rating of A-/Stable from India Ratings. Such ratings are considered to carry low credit risk.
Why not invest in Kosamattam Finance NCD (July 2024)?
- The company has an A-/Stable credit rating from India Ratings, though it was BBB until last year. Bonds with a credit rating below A grade are considered to be very high risk.
- The COVID-19 pandemic has significantly affected business operations and may continue to have an impact in the future.
- Such NBFC companies are subject to RBI scrutiny and adverse action may impact their business.
- In the past, there have been delays in repayment of principal and interest on NCDs by some NBFC companies.
- Please refer to the prospectus for further details of the risk factors listed. Kothamatam NCD July 24th Prospectus.
How should one invest in these NCDs?
This 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 application form can be downloaded from the lead manager’s website. Please refer to the prospectus for more details.
Should you invest in Kosamattam Finance NCD July 2024 issue?
- These NCDs offer high interest rates of up to 10.25% resulting in a yield of 10.75%.The company has a good credit rating of A-/Stable from India Ratings.
- Meanwhile, some small finance banks are offering interest rates of up to 9% with deposit insurance coverage up to Rs 50 lakh. Till 2022, Kothamatam Finance NCD has a poor credit rating. BWR Rating BBB These were upgraded to A-/Stable by India Ratings this year.
Investors who understand both the above pros and cons and are willing to take the risk can invest in such NCDs.
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