12.61% Manappuram Finance Secured NCD Mar-2014

Manappuram Finance NCD-Mar-2014Manappuram Finance Secured NCD Mar-2014-You can invest

Manappuram Finance has earlier issued NCD in Jan-2014. It is issuing secured NCD’s for one more time (secured non-convertible debentures). Even this time, it comes with 11 different options where the tenure is for 400 days to 70 months. These bonds would double your money in 70 months (less than 6 years). The annualized yield is as high as 12.61% per annum. I have already indicated my views in my previous article about company performance, positive and negative factors, but let me repeat some of the important points related to these NCD’s.

Also Read: Where NRI's can invest on repatriatio basis?

About Manappuram Finance Limited

Manappuram Finance is a leading gold loan company / non banking financial company (NBFC) which is engaged in providing gold loans against house hold gold ornaments. This company is listed in BSE and NSE.

Manappuram Finance NCD of Mar-2014

Manappuram Finance is issuing NCD’s in 11 options and all these are secured in nature.

Features of Manappuram Finance NCD of Mar-2014

  • Issue start date: 5-Mar-2014
  • Issue end date: 25-Mar-2014
  • NCD’s are available in 11 options.
  • Interest payable monthly, annually and at maturity depending on the option of NCD.
  • Face value of the NCD bond is Rs 1,000.
  • Minimum investment is for 10 bonds means, you need to invest for a minimum of Rs 10,000. Beyond this you can invest in multiples of 1 bond.
  • These NCD bonds would be listed on BSE. Hence, these are liquid investments.
  • Non-Resident Indians (NRI’s) cannot invest in these bonds.
  • The issue size is Rs 100 Crores with an option to retain over subscription for another Rs 100 Crores
  • These NCD ratings are A+ by ICRA. Please note that Jan-2014 NCD’s were rated as A+/Negative by CRISIL
  • Manappuram Finance NCD-Mar-2014-Prospectus can be downloaded at this link

Below are the Interest rates details.

 
Series Tenure (Months) Face Value (Rs) Interest payment Coupon Rate (Interest) Individuals Effective yield per annum Maturity Value
I 400 days 1,000 Cumulative NA 11.00% 1,122
             
II 24 1,000 Monthly 11.50% 12.13% 1,000
             
III 24 1,000 Annually 12.00% 12.00% 1,000
             
IV 24 1,000 Cumulative NA 12.00% 1,254
             
V 36 1,000 Monthly 12.25% 12.94% 1,000
             
VI 36 1,000 Annually 12.50% 12.50% 1,000
             
VII 36 1,000 Cumulative NA 12.50% 1,424
             
VIII 60 1,000 Monthly 11.50% 12.13% 1,000
             
IX 60 1,000 Annually 12.00% 12.00% 1,000
             
X 60 1,000 Cumulative NA 12.00% 1,762
             
XI 70 1,000 Cumulative NA 12.61% 2,000
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How is the company is doing in terms of profits?

1) Its profits are as below:

  • Year ended Mar-2009 – Rs 30.30 Crores
  • Year ended Mar-2010 – Rs 119.72 Crores
  • Year ended Mar-2011 – Rs 282.66 Crores
  • Year ended Mar-2012 – Rs 591.46 Crores
  • Year ended Mar-2013 – Rs 208.43 Crores

2) Non Performing Assets (NPA) of the company are 0.67% (FY2011-12) Vs 1.21% (FY 2012-13). Last 6 months ended Sep-2013 indicates at 1.06%.

Positive factors to invest

  • Company is earning good profits in the last 5 years. However, its profits declined in the last 2 years.
  • It offers secure NCD’s where your money is safe. Means in case of any unforeseen thing happening to companies, investors of NCD would still receive the principal and interest. Hence it is safe to invest in such secured NCD’s.
  • Attractive interest rates between 11.50% to 12.25% per annum
  • You can double your money in 70 months (less than 6 years)

Negative factors

  • Capital adequacy ratio as per RBI limit should be 15% and actual as on 31-Mar-2013 is 22.67% which is the outside RBI limit.
  • Loans on gold ornaments are riskier. Decline in gold prices (which happened a few months back), can pose high risk to such business.
  • Increase in NPA’s for the year ending Mar-2013 is a major concern.

Also Read: Less expensive gift ideas for your spouse or girl friend

How to apply?

You can apply through your broker where you have a demat account. Alternatively, you can download application from Manappuram website and do it through a manual process.

Conclusion: Manappuram secured NCD’s offer good interest rates. Since these are secured in nature, even in case of bad performance by the company, your payment may get delayed, but you would get your money back. You can lock some of your money in such high interest rate options.

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Suresh
Manappuram Finance NCD – Mar-2014

12 comments

  • onefoothurdle

    How about buying them in secondary market hopefully at a discount. Please email me I am very interested in bonds secondary markets

  • Madhu Nair

    Hi,

    I am an NRE and planning to deposit a sum of 10 lacks in NCD for a long term to get interest in monthly basis.
    Could you please tell me how much will be the monthly interest for 10 lakhs.

  • Sivaraman

    Hi Suresh,

    I saw that the Option 11 NCD's are available at 951 face value. My query even if I choose 5yrs option but I see good returns in the middle (If bond value increases) Can I withdraw my amount earlier? I'm little weak on subject related to Bond. Please explain

    • Sivaraman, You can sell or redeem at any time at stock exchange in case you see bond value increases. However, once you sell you would not get such high interest unless you invest in some other secured NCD offering similar returns.

  • Mohit

    Hi Suresh,

    I was not able to find out anything on TDS…I want to invest 1 lac in 36 month monthly interest..will they deduct tds.

    Regards,

    Mohit

     

     

    • Hi Mohit, If you invest through demat account, company would not deduct any TDS. If you do it manual process, company would deduct TDS. However whether company is deducting or not, you would be liable to pay income tax based on interest received during the year. You need to declare the same in your ITR and pay necessary tax based on your income tax slab.

  • vinod

    Hi Mr suresh,

    How do we apply for this.do we directly apply via the company website.I tried to call their customer service number but go no response.I havent made such investments earlier hence asking this basic question.

    Regards

    Vinod

    • Vinod, Don’t you have demat account ? If, yes, please login to your demat account and apply as the process is simple. If you want to apply through manual process, please download the application form or visit any of the collection centres and fill the form and give a cheque. You would get the NCD bond to your home. For details of collections centre, check the prospectus first page.

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