KLM Axiva Finvest is coming up with secured NCD Issue that would open for subscription on November 14, 2024. KLM Axiva Finvest is a non deposit taking systemically important NBFC in India. KLM Axiva Finvest NCD interest rates are up to 11% and yield works out up to 11.1%. Your money would get doubled in 79 months. Should you invest in KLM Axiva Finvest NCD issue of Nov-2024? What are the risk factors one should consider before investing KLM Axiva NCD 2024 issue? Let me provide a complete review of these NCD bonds.
About KLM Axiva Finvest Limited
They are a non-deposit taking 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 jewellery
(ii) micro, small and medium enterprises loan
(iii) personal loan
(iv) microfinance loan.
As on September 30, 2024, they operate through 670 branches across six states namely Kerala, Karnataka, Tamil Nadu, Telangana, Andhra Pradesh and Maharashtra managed through its corporate office located at Kochi.
KLM Axiva Finvest NCD – Nov-2024 Issue Details
| Subscription opening Date | 14-Nov-24 |
| Subscription closure Date | 28-Nov-24 |
| Issuing Security Name | KLM Axiva Finvest Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | Rs 50 Crores |
| Issue Size (Option to retain over subscriptoin) | Rs 50 Crores |
| Total issue size | Rs 100 Crores |
| Issue price | Rs 1,000 per bond |
| Face value | Rs 1,000 per bond |
| Series | I to X |
| Minimum Lot size | 10 bonds and 1 bond there after |
| Tenure | 400 days, 16, 18 and 79 Months, 2 , 3 and 5 Years |
| 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 |
KLM Axiva Finvest NCD Nov-2024 – 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 | 79 Months |
| Coupon (% per Annum) | 9.50% | NA | 9.85% | 10.00% | 10.25% | 10.25% | 10.50% | 10.75% | 11.00% | NA |
| Effective Yield (% per Annum) | 9.92% | 9.96% | 10.31% | 10.47% | 10.25% | 10.75% | 10.50% | 11.30% | 11.00% | 11.10% |
| Amount on Maturity (In Rs.) | 1,000 | 1,135 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 2,000 |
KLM Axiva Finvest NCD Nov-2024 – Ratings
The secured NCDs have been rated as BBB-/Stable by India Ratings and Research and ACUITE BBB by Acuite Ratings and Research Limited.
The rating of NCDs indicates that instruments with this rating are considered to have a moderate degree of safety regarding timely servicing of financial obligations and carry a moderate credit risk.
KLM Axiva Finvest NCD Nov-2024 – Are these secured NCD bonds?
Senior (the claims of the Debenture Holders holding NCDs shall be superior to the claims of any unsecured creditors, subject to applicable statutory and/or regulatory requirements).
The NCDs would constitute secured obligations of our Company and shall have 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 equal to the value of one time of the NCDs outstanding plus interest accrued thereon.
How is the company doing in terms of profits?
Its 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 1,833.1 Lakhs
- Year ended Mar-2024 – Rs 2,302.8 Lakhs
KLM Axiva Finvest NCD Nov-2024 – Why to invest?
- These NCDs offer attractive interest rates up to 10.75% and yield up to 11.1%.
- The company is earning consistent and improving margins in the last few years. One should always invest in consisting growing companies with strong financials.
- It issues Secured NCDs. In case of any financial crisis and 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 Nov-2024 – Why not to invest?
- Company has received Show-Cause notices from RBI and any adverse action taken could affect its business.
- They are subject to supervision by regulatory authorities and non-compliance with observations made by regulatory authorities during their periodic inspections could expose them to penalties and restrictions which in turn may affect its business and operations.
- Company, its Promoter and Directors and other companies have been subject to search and seizure operations conducted by the Indian income tax authorities.
- Its financial performance is particularly vulnerable to interest rate volatility.
- High levels of customer defaults or delays in repayment of loans could adversely affect its business.
- If they are unable to manage the level of NPAs in its Loan Assets, its financial position and results of operations may suffer.
- Investors should refer all other Internal and external factors indicated in the KLM Axiva Finvest Nov-2024 NCD prospectus.
How to apply KLM Axiva Finvest NCD Nov-2024 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 IND BBB-/Stable and Acuite Ratings as ACUITE BBB. NCD bonds with such ratings are considered as high risk.
KLM Axiva Finvest NCD Nov-2024 – Should you invest or avoid?
KLM Axiva Finvest is offering secured NCDs as part of Nov-2024 issue. It offers high interest rates up to 10.75% and yield works out to be up to 11.1%. These are secured NCDs too.
On the other side, these bonds carry a low credit rating of BBB- Stable by IND Ratings and Acuite 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 earlier and delays from many NBFC companies in repayment of the principal capital to NCD investors.
Investors should consider pros and cons before investing in such NCDs.
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