5 Upcoming NCDs in India in Jan-Feb-March-2019

Upcoming NCDs in India in Jan-Feb-March-2019Upcoming NCDs in India in Jan-Feb-March-2019


There are flood of Non Convertible Debentures (NCDs) that are lined up now in 2019. While there are secured NCDs being issued, some companies are issuing Unsecured NCDs too. There are NCDs that are providing up to 10.5% interest rates, which are tempting investors to apply so that they can get fixed and regular income. Investors need to be very careful now owing to several companies going on default mode now in India. Which are the upcoming NCDs in India in Jan/Feb/March-2019. What are the interest rates expected from these NCDs? Should you invest in these upcoming NCDs now in 2019?

Also Read: Best Mutual Fund Apps to invest online in India

What are Non Convertible Debenture (NCD) Bonds?


If you want to more about NCD bonds, you can view this video.

5 Upcoming NCDs in India in Jan-Feb-March-2019


Here are the list of upcoming NCD Bonds in India in Jan/Feb/March-2019.

#1 – Manappuram Finance Secured NCD in Jan-2019


Recently Manappuram Finance has got approvals for issue of NCDs.

The issue would open for subscription from 28th January, 2019.

The issue would close on 27th February, 2019. However, if it is oversubscribed, it would get closer before the end date.

Manappuram Finance has come up with secured NCDs. Since it offers secured NCDs, in case of nonperformance by the company and the company get windup, investors of secured NCDs would get preference in repayment of capital. Hence, these NCDs are relatively safer compared to unsecured NCDs.

Interest rates are ranging between 9.35% to 10.15%.

It has come up with 7 options in NCDs and tenure ranging between 36 months, 70 months and 2,617 days (86 months).

These NCD’s are rated as CARE AA/Stable by CARE Ratings and BWR AA+ Stable by Brickwork Ratings.

The current Tranche II issue size Rs 150 Crores with an option to retain another Rs 587 Crores totaling to Rs 737 Crores.

The NCDs are proposed to be listed on BSE. The NCDs shall be listed within 6 Working Days from the date of the Issue Closure.

Edelweiss Financial Services and AK Capital Services are the Lead managers to the issue.

You can review the Manappuram NCDs of Jan 2019 here.

#2 – Magma Fincorp NCD in Feb-2019


Magma Fincorp Limited has filed a draft prospectus on 15th January, 2019

The issue would open for subscription in Feb-2019. The exact date is yet to be known.

The issue would close within 1 month from the date of issue. However, if it is oversubscribed, it would get closer before the indicated end date.

Magma Fincorp is coming up with secured NCDs. Since it offers secured NCDs, in case of nonperformance by the company and the company get windup, investors of secured NCDs would get preference in repayment of capital. Hence, these NCDs are relatively safer compared to unsecured NCDs.

Interest rates are ranging between 9% to 10.5% per annum.

Details of tenure of NCDs are yet to be known.

These NCD’s are rated as ACUITEE AA/Stable by Acuitee Ratings and BWR AA Stable by Brickwork Ratings. The rating of the NCDs by Brickworks and Acuité indicate that instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations and carry very low credit risk.

The total issue size Rs 1,000 Crores. However, it can issue them in various tranches (lots).

The NCDs are proposed to be listed on BSE and NSE. The NCDs shall be listed within 6 Working Days from the date of the Issue Closure.

Edelweiss Financial Services and AK Capital Services are the Lead managers to the issue.

#3 – L&T Finance NCD in Feb/March-2019


Magma Fincorp Limited has filed a draft prospectus on 17th January, 2019

The issue would open for subscription in Feb-2019/Mar-2019. The exact date is yet to be known.

The issue would close within 1 month from the date of issue. However, if it is oversubscribed, it would get closer before the indicated end date.

L&T Finance is coming up with secured NCDs and unsecured NCDs. Since it offers secured NCDs, in case of nonperformance by the company and the company get windup, investors of secured NCDs would get preference in repayment of capital. Hence, these NCDs are relatively safer compared to unsecured NCDs.

Interest rates are expected to be in the range of 10% to 10.5% per annum.

Details of tenure of NCDs are yet to be known.

These NCD’s are rated as AAA / Stable by ICRA, ICRA and BWR Ratings. The rating of NCDs by ICRA, CARE and India Ratings indicate that instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations and carry lowest credit risk.

The total issue size Rs 5,000 Crores. However, it can issue them in various tranches (lots).

The NCDs are proposed to be listed on BSE and NSE. The NCDs shall be listed within 6 Working Days from the date of the Issue Closure.

Edelweiss Financial Services, AK Capital Services and Trust Advisors are the Lead managers to the issue.

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#4 – Indiabulls Commercial Credit NCD in Feb/March-2019


Indiabulls Commercial Credit Limited has filed a draft prospectus on 18th January, 2019 for issuing NCDs.

The issue would open for subscription in Feb-2019/Mar-2019. The exact date is yet to be known.

The issue would close within 1 month from the date of issue. However, if it is oversubscribed, it would get closer before the indicated end date.

Indiabulls Commercial Credit is coming up with secured NCDs and unsecured NCDs. Since it offers secured NCDs, in case of nonperformance by the company and the company get windup, investors of secured NCDs would get preference in repayment of capital. Hence, these NCDs are relatively safer compared to unsecured NCDs.

Interest rates are expected to be in the range of 9% to 10.5% per annum.

Details of tenure of NCDs are yet to be known.

These NCD’s are rated as AAA / Stable by CRISIL and CARE. The rating of NCDs by CRISIL and CARE indicate that instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry the lowest credit risk.

The total issue size Rs 3,000 Crores for Secured NCDs and Rs 500 Crores for unsecured NCDs totaling to 5,000 Crores. However, it can issue them in various tranches (lots).

The NCDs are proposed to be listed on BSE and NSE. The NCDs shall be listed within 6 Working Days from the date of the Issue Closure.

Edelweiss Financial Services, AK Capital Services, Axis Bank and Trust Advisors are the Lead managers to the issue.

#5 – Indiabulls Consumer Finance NCD in Feb/Mar-19


Indiabulls Consumer Finance Limited has filed a draft prospectus on 21st  January, 2019 for issuing NCDs.

The issue would open for subscription in Feb-2019/Mar-2019. The exact date is yet to be known.

The issue would close within 1 month from the date of issue. However, if it is oversubscribed, it would get closer before the indicated end date.

Indiabulls Consumer Finance is coming up with secured NCDs. Since it offers secured NCDs, in case of nonperformance by the company and the company get windup, investors of secured NCDs would get preference in repayment of capital. Hence, these NCDs are relatively safer compared to unsecured NCDs.

Its earlier NCD issued in Mar-2018 for 1 year tenure had 8.5% interest rates. However, depending on the tenure, the interest range could be 9% to 10.5% per annum.

Details of tenure of NCDs are yet to be known.

These NCD’s are rated as AA / Stable by CARE and BWR AA+/ Stable by Brickwork Ratings. These instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations and carry very low credit risk.

The total issue size Rs 300 Crores. However, it can issue them in various tranches (lots).

The NCDs are proposed to be listed on BSE and NSE. The NCDs shall be listed within 6 Working Days from the date of the Issue Closure.

Edelweiss Financial Services, AK Capital Services, Axis Bank and Trust Advisors are the Lead managers to the issue.

Also Read: Chalet Hotels IPO – Should you invest or avoid?

Should you invest in these upcoming NCDs in Jan/Feb/March-2019?


You need to ask a few things before investing in such NCDs

1) Investing in NCD’s would be high risk, especially when finance companies are facing a liquidity crunch. Do you want to invest in such NCD’s then?

2) These NCD’s being offered are for 3 years, 5 years, 7 years and 10 years tenure. Do you want to park your money in high risk NCD for long term of 5 to 10 years? Parking money in high risk options for longer time is not advisable as no one can predict what happens to companies in the long term. You can look for investing in 3 years secured NCDs as these are for short term and they are secured in nature. 

3)  If you are a high risk taker, investing in the secured NCDs that give 8%+ returns may be one of the best investment options.

4) Some of the company NPAs are very high. In future there could be delays in payment of interest if they start writing off money and their profits shrink. Are you okay with this?

5) There are series of scams and liquidity issues in the last 6-9 months. Take PNB Scam or IL&FS Scam.  Even 3 days back, Zee Entertainment / Essel group head accepted that there is liquidity crunch and there could be a delay in payments to vendors and to mutual fund schemes which invested in their company instruments.

What do you think about investing in upcoming NCDs of Jan/Feb/March-2019 then?

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Suresh

5 Upcoming NCDs in India in Jan-Feb-March-2019

9 comments

  • jagdish.k. bhatia

    jagdish. k. bhatia
    15 february , 2019

    I am a retired person i have invested in bank f.d rate 8;25. Now i want to invest in upcoming

    n.c.d [secuerd] like l& T finance or india bull who are offering 10.to 10.50 percent. some people

    has giving me to invest in SBI EQUITY HYBRID FUND GROTH [SWP].PL guide me.

  • jagdish.k bhatia

    suppose i want to invest in higher returns launching n.c.d in february & march 2019 like

    larsen toubro or india bull cmming n.c.d rs 15 lacs [rs fifteen lacs]
    in secured debenture. i am a retired person which is the safest investment of person like me . pl guide me properly.

    • Hello Jagdish, Even in secured NCDs there is risk element. However if you are willing to invest in them, you can go high rated NCDs among them. You can keep watching this space for more info about the interest rates and other features of these NCDs in Feb and March

  • MoneyManch

    Hi Suresh, Really Nice.

  • Rajagopal Shenoy

    Companies like Shriram Transport Finance have both FDs and NCDs issued at the moment. You have been suggesting your readers to be very watchful of investing in NCDs after the recent IL&FS debacle. What are your views on company FDs? Are they safer than the NCDs? Which is better – STFC FD or NCD? Thank you.

    • Hello Rajagopal, Secured NCDs are somewhat safer compared to unsecured NCDS or Company FDs. Both unsecured NCDs or company FDs are high risk as they are not secured with any assets

      • Rajagopal Shenoy

        Thank you for the answer. One doubt: If secured NCDs are safer than the company FDs, then why is it that company FD interest rates are lower compared to secured NCDs? I always thought lower the risk, lower is the return.

        • Hello Rajagopal, NCDs are issued only for pre-defined period of 1 month. After that these are not available for subscription from company. Yes you can always buy from NSE/BSE if there are sellers. During that 1 month period of subscription, if such company subscription is not fully subscribed, these would get cancelled and they need to go to SEBI for fresh approvals. In case of company fd schemes, these are available 365 days in a year. The approvals once taken from SEBI, company is not worried about any further approvals. Hence company FD rates are always lower as these are available for investment.

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