KLM Axiva Finvest is coming up with secured NCD Issue that opened for subscription now. KLM Axiva Finvest is a non deposit taking systemically important NBFC in India. KLM Axiva Finvest NCD interest rates are up to 10.75% and yield works out up to 11.02%. Your money would get doubled in 82 months. Should you invest in KLM Axiva Finvest NCD issue of Aug-2023? What are the risk factors one should consider before investing KLM Axiva NCD 2023 issue?
There are a few NCD issues coming up now. Credit Access Grameen NCD Aug-2023 issue has opened for subscription on 24th August, 2023.
About KLM Axiva Finvest Limited
They are a non-deposit taking and non – systemically important non-banking finance company primarily serving low and middle income individuals and businesses that have limited or no access to formal banking and finance channels. They operate primarily in four business verticals:
(i) Gold loan business, lending money against the pledge of household jewelry
(ii) Micro, small and medium enterprise loan
(iii) Personal loan and
(iv) Microfinance loan to women customers.
KLM Axiva Finvest NCD – Aug-2023 – Issue Details
| Subscription opening Date | 24-Aug-23 |
| Subscription closure Date | 06-Sep-23 |
| Issuing Security Name | KLM Axiva Finvest Limited |
| Security Type | Secured, Redeemable and Non-Convertible NCDs |
| Issue Size (Base) | Rs 75 Crores |
| Issue Size (Option to retain over subscriptoin) | Rs 75 Crores |
| Total issue size | Rs 150 Crores |
| Issue price | Rs 1,000 per bond |
| Face value | Rs 1,000 per bond |
| Series | 1 to 10 |
| Minimum Lot size | 5 bonds and 1 bond there after |
| Tenure | 400 days to 82 months |
| Interest Payment frequency | Monthly, yearly and on maturity |
| Listing on | Within 6 working days on BSE |
| Lead Manager | Vivro Financial Services Private Limited |
| Debenture Trustee/s | Vistra ITCL (India) Limited |
NRI’s cannot apply to this NCD subscription.
KLM Axiva Finvest NCD Aug-2023 Prospectus
KLM Axiva Finvest NCD Interest Rates
| Series | I | II | III | IV | V | VI | VII | VIII | IX | X |
|---|---|---|---|---|---|---|---|---|---|---|
| Frequency of Interest Payment | Monthly | Cumulative | Monthly | Monthly | Annual | Monthly | Annual | Monthly | Annual | Cumulative |
| Tenure | 400 Days | 16 Months | 18 Months | 2 Years | 2 Years | 3 Years | 3 Years | 5 Years | 5 Years | 82 Months |
| Coupon (% per Annum) | 9.00% | NA | 9.35% | 9.50% | 9.75% | 9.75% | 10.00% | 10.50% | 10.75% | NA |
| Effective Yield (% per Annum) | 9.38% | 9.60% | 9.76% | 9.92% | 9.75% | 10.20% | 10.00% | 11.02% | 10.75% | 10.68% |
| Amount on Maturity (In Rs.) | 1,000 | 1,130 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 2,000 |
How is the NCD allocation done?
Here is how the NCDs would allocate to investors.
KLM Axiva Finvest NCD Ratings for Aug-23 issue
The secured NCDs have been rated by India Ratings and Research as Ind BBB-/Stable.
The rating of NCDs indicates that instruments with this rating are considered to have a moderate risk of default regarding timely servicing of financial obligations.
KLM Axiva Finvest NCD Aug issue – Are these secured NCD bonds?
These bonds are secured.
The principal amount of the NCDs with all interest due on the NCDs shall be secured by way of first ranking pari passu charge with existing secured creditors, on all movable assets, including book debts and receivables, cash and bank balances, other movable assets. Loans and advances, both present and future of the company.
How is the company doing in terms of profits?
Its standalone profits are as below:
Year ended Mar-2020 – Rs 50.6 Lakhs
Year ended Mar-2021 – Rs 705.8 Lakhs
Year ended Mar-2022 – Rs 1,138.3 Lakhs
Year ended Mar-2023 – Rs 1,833.3 Lakhs
KLM Axiva Finvest NCD – Why to invest?
- These NCDs offer attractive interest rates up to 10.75% and yield up to 11.02%.
- The company is earning consistent and improving margins in the last few years. One should always invest in consisting growing companies with strong financials where the repayment to NCD investors is done on time without delay.
- It issues Secured NCDs. In case of any under performance of the company and the company gets shut down for some reason, NCD investors would get preference in repayment of capital along with interest. Hence, it is safe to invest in such secured NCD options. However, it is only preference is given to NCD investors and no guarantee that entire amount would be paid-back in such cases.
KLM Axiva Finvest NCD Aug-2023 issue – Why not to invest?
- Company is subject to supervision by regulatory authorities. Any non compliance could expose them to penalties and restrictions which can affect its business.
- Company has received show cause notice from RBI and action taken by them affect its business.
- Company, promoter and directors have been subject to search and siezure operations conducted by Indian IT authorities.
- Company financial performance is particularly vulnerable to interest rate volatality.
- High levels of customer defaults or delays in repayment of loans can affect company business and operations
- Investors should refer all other Internal and external factors indicated in the prospectus of the NCD.
How to apply KLM Axiva NCD issue?
KLM Axiva Finvest NCD Issue is available in only in demat form. You can apply online or through any of the broker website where you are maintaining a demat account. Full form can be downloaded on the lead manager website. For more information on this, you can refer prospectus.
Is KLM Axiva NCD safe?
KLM Axiva NCDs are rated by Ind Ratings as BBB-/Stable. NCD bonds with such ratings are considered as high risk.
KLM Axiva NCD Aug-2023 Review – Should you invest or avoid?
KLM Axiva Finvest is offering secured NCDs in Aug-2023 issue. These interest rates are high and up to 10.75% and yield works out to be up to 11.02%. These are secured NCDs too.
On the other side, these bonds carry a low credit rating of BBB- Stable by Ind Ratings which are high risk. Your capital could be at risk if such NBFC company gets into financial crisis. Don’t forget about the DHFL crisis and delays from many NBFC companies in repayment of the principal capital to NCD investors.
Investors may avoid such high risk NCDs for now.
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When the NCD tenure is over, will the principal + interest be automatically transferred to debit account, or do we have to sell the NCD in the secondary market ?
It would not automatically transfer. Company need to release the amount to the designated bank account. It might happen immediately or with delay depending on the company process.