Nido Home Finance Limited is launching secured NCDs on December 17, 2024, with interest rates of up to 11%. Here’s a detailed review to help you decide whether to invest.
About Nido Home Finance Limited
Company is a non-deposit taking Housing Finance Company focused on offering secured loan products to suit the needs of individuals, including small ticket loans to its customers in the affordable housing category.
They are part of Edelweiss group which is one of the leading diversified financial services groups in India. Nido Home Finance Limited earlier known as Edelweiss Housing Finance Limited.
They offer customers a range of mortgage-related loan products, including:
Home Loans, which includes offering secured loans to salaried individuals, self-employed individuals, and others for purchase/ construction/ renovation of residential properties, against mortgage of the same property, comprises 56.97% of its Loan Book as at March 31, 2023, 63.95% of its Loan Book as at March 31, 2024 and 61.34% of its Loan Book as at June 30, 2024.
Non-Housing Loans including loan against property (LAP), is a loan facility majorly offered to self-employed individuals, against an unencumbered property, where the end use may be towards deployment of working capital, purchase of property or any other purpose. As a part of LAP, lease rental discounting is also offered where the lessee is a corporate entity.
Construction Finance, is a loan facility offered to real estate developers towards the cost of the construction of residential project. The financing is against a real estate collateral along with / without any other security. The loan disbursements are construction linked.
Nido Home Finance NCDs – Dec-2024 – Issue Details
| Subscription opening Date | 17-Dec-24 |
| Subscription closure Date | 31-Dec-24 |
| Issuing Security Name | Nido Home Finance Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | Rs 50 Crores |
| Issue Size (Option to retain over subscription) | 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 | 24, 36, 60 and 120 Months |
| Interest Payment frequency | Monthly or Yearly or on Maturity |
| Listing on | Within 6 working days on BSE |
| Lead Manager | Tipsons Consultancy Services Private Limited Nuvama Wealth Management Limited |
| Debenture Trustee/s | Beacon Trusteeship Limited |
Nido Home Finance NCDs – Dec-2024 – Interest Rates
| Series | I | II | III | IV | V | VI | VII | VIII | IX | X |
|---|---|---|---|---|---|---|---|---|---|---|
| Frequency of Interest Payment | Annual | Cumulative | Monthly | Annual | Cumulative | Monthly | Annual | Cumulative | Monthly | Annual |
| Tenure (months) | 24 | 24 | 36 | 36 | 36 | 60 | 60 | 60 | 120 | 120 |
| Coupon (% per Annum) | 9.50% | NA | 9.58% | 10.00% | NA | 10.03% | 10.50% | NA | 10.49% | 11.00% |
| Effective Yield (% per Annum) | 9.50% | 9.50% | 10.01% | 10.00% | 10.00% | 10.50% | 10.49% | 10.50% | 11.00% | 10.99% |
| Amount on Maturity (In Rs.) | 1,000.00 | 1,191.13 | 1,000.00 | 1,000.00 | 1,331.18 | 1,000* | 1,000* | 1,648.27 | 1,000** | 1,000** |
*Staggered Redemption in Two (2) annual payments of ₹500 each, starting from 4th Anniversary until Maturity
**Staggered Redemption in Five (5) annual payments of ₹200 each, starting from 6th Anniversary until maturity
Nido Home Finance NCDs – Dec-2024 – Credit Ratings
CRISIL Ratings assigned Nido Home Finance NCD rating as CRISIL A+/ Watch Negative. Securities with this rating are considered to have an adequate degree of safety regarding timely servicing of financial obligations. Such securities carry a low credit risk.
How is the company doing in terms of profits?
Its profits are as below:
- FY2021 – Rs 3.72 Crores
- FY2022 – Rs 13.8 Crores
- FY2023 – Rs 16.06 Crores
- FY2024 – Rs 19.3 Crores
Why to invest in Nido Home Finance NCDs – Dec-2024?
- Nido Home Finance NCD’s offer attractive interest rates where investors can get interest up to 11% per annum.
- Company is generating consistent margins. Investors should always invest in growing and consistent margin generating companies.
- It issues secured NCDs. In case a company gets closed for some reason, secured NCD investors would get preference in repayment of capital along with interest as those backed up by assets of the company. Hence, it is safe to invest in such secured NCD options.
Why not to invest in Nido Home Finance NCDs – Dec-2024?
- Company is an HFC and therefore subject to various regulatory and legal Also, future regulatory changes may have a material adverse effect on its business.
- They require substantial capital for its business, and any disruption in the sources of capital could have an adverse effect on its business.
- Any negative events affecting the Indian real estate sector could adversely affect the value of the collateral for its loans, its business and result of operations.
- Any increase in the levels of non-performing assets, for any reason whatsoever, would adversely affect its business.
- They may face asset-liability mismatches, which could affect its liquidity and consequently affect its operations and financial performance adversely.
- Refer Nido Home Finance NCD Dec-24 prospectus link for complete risk factors.
Should you invest in Nido Home Finance NCDs – December 2024?
Current Nido Home Finance NCD issue offers high interest rates and yield. These days even small finance banks are offering high FD rates, however these NCDs still attractive and offer up to 11% interest rates. Company is also earning consistent margins and these secured NCDs too.
On the other side, investors should not forget about the risks involved in investing in NBFC bonds. Earlier there were many NBFCs which were defaulters, and there were delays in repayments of capital and interest. Also this NCD issue has certain series that repays principal amount in installments. Means, you would get your capital amount in installments.
Investors must also consider the credit rating of CRISIL A+/Watch Negative, which indicates adequate safety but flags caution.
These NCDs are best suited for high risk investors looking for better yields than FDs but willing to accept the risk associated with NBFC Bonds.
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Hi Suresh,
I am one of the long term follower of your blogs, thank you for your write ups..I am planning to enter into the bond markets and I have zerodha and icici securities account, where should I buy this bonds? Also can you suggest some of the safest bonds that can help me to get passive income ?
Both these platforms are good for investing in bonds.