9.25% Indiabulls Housing Finance NCD – December 2021 – Review

Indiabulls Housing Finance NCD – December 2021 - ReviewIndiabulls Housing Finance Dec-21 NCD – Issue Details,  Interest Rates and Risk Factors

Indiabulls Housing Finance Limited is coming up with NCD issue which would open for subscription on 9th December 2021. In this Tranche-I NCD issue, it is coming up with secured NCD bonds now. Indiabulls Housing Finance Limited is one of the leading housing finance companies (HFCs) in India in terms of AUM. The NCD interest rates for Indiabulls Housing Finance NCD are up to 9.25% and yield is up to 9.26%. These NCDs have tenure of 24 months to 60 months. These interests are paid either monthly or yearly or on maturity. Should you invest in Indiabulls Housing Finance NCD’s of December 2021 issue? What are the risk factors one should consider before investing in such high risk NCDs?

Also Read: IIFL Home Finance NCD Dec-21 issue offers 9.75% Yield – Should you invest or avoid?

About Indiabulls Housing Finance Limited

Company is one of the largest housing finance companies (HFCs) in India in terms of AUM. They are a non-deposit taking HFC registered with the NHB.

Company primarily focuses on long-term secured mortgage-backed loans. Majority of its loan book comprises of secured loans. They primarily offer housing loans and loans against property to its target client base of salaried and self-employed individuals and micro, small and medium-sized enterprises. They also offer mortgage loans to real estate developers in India in the form of lease rental discounting for commercial premises and construction finance for the construction of residential premises.

Indiabulls Housing Finance NCD – Video Version

If you are bored to read, view our video version. You can subscribe to Myinvestmentideas – Youtube channel

Indiabulls Housing Finance NCD issue details – Dec 2021

NCD subscription opens on 9th December 2021 (Thursday) and closes on 20th December 2021 (Monday).

NCD’s are available in 8 different options. It offers NCDs for 24 months, 36 months and 60 months tenure.

Coupon interest rates for Category III and IV investors (including Retail investors) are between 8.42% to 9.25%.  Yield on these NCD bonds works out up to 9.26% which is highest.

These are secured NCDs.

Interest is payable monthly or yearly or on maturity depending on the option chosen by the NCD investor.

The face value of the NCD bond is Rs 1000.

Investors need to do minimum investment of 10 bonds / Rs 10,000. Beyond this one can invest in multiples of 1 bond.

These NCD bonds would be listed on NSE and BSE within 6 working days from the issue closure date. Hence these are somewhat liquid investments.

These are allotted on first come first serve basis. The issue can be closed earlier if it is oversubscribed before the closure date.

NRI’s cannot apply to this NCD subscription.

The base issue size of Dec-21 NCD issue is Rs 200 Crores with an option to retain over subscription up to Rs 800 Crores totaling to Rs 1,000 Crores.

Edelweiss Financial Services, IIFL Securities and Trust Investment Services are the lead managers for the issue.

Indiabulls Housing Finance Dec-2021 NCD Prospectus

Interest rates of Indiabulls Housing Finance December 2021 NCD

Here are the Indiabulls Housing Finance interest rates for Category III and IV investors (including retail investors).

Indiabulls Housing Finance NCD Dec-21 - Interest Rates, Coupon and Yield

What are Indiabulls Housing Finance NCD rating?

These NCDs have been rated as CRISIL AA / Stable by CRISIL Ratings and BWR AA + Negative by Brickworks Ratings. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk.

How is the company doing in terms of profits?

Here are the details of profits of the company.

Year ending Mar-2019 – Rs 4,057.7 Crores

Year ending Mar-2020 – Rs 2,1659 Crores

Year ending Mar-2021 – Rs 1,201.5 Crores

6 months ending Sep-21 – Rs 568 Crores.

How these Indiabulls Housing Finance NCD’s are secured?

The secured NCDs proposed to be issued will be secured by a first ranking pari passu charge on present and future receivables and current assets of the Issuer for the principal amount and accrued interest thereon as specifically set out in and fully described in the Debenture Trust Deed. The NCDs will have a security cover of minimum 1.25 times on the principal amount and interest thereon.

Why to invest in Indiabulls Housing Finance NCD’s?

1) Indiabulls Housing Finance bonds offer attractive interest rates where investors can get interest up to 9.25% per annum.

2) It issues secured NCDs. Secured NCDs are safe compared to unsecured NCDs. In case company gets wind-up/shut down 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.

3) Company has good credit rating of AA from CRISIL Ratings and Brickworks Ratings.

Why not to invest in Indiabulls Housing Finance NCD’s?

1) Company profits are on declining mode.

2) Recent outbreaks of the covid-19 and lockdowns have impact on company business. Any such outbreaks in future cannot be predicted and can have impact in the operations of the company.

3) Increase in NPAs can affect the business.

4) Refer prospectus for complete risk factors.

You may like: Jhunjhunwala backed Metro Brands IPO opens on 8 Dec – Should you subscribe?

How to subscribe to these NCDs?

This 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. Application forms can be downloaded on the lead manager web site. For more information on this you can refer prospectus.

Should you invest in Indiabulls Housing Finance Dec-21 NCD issue?

Indiabulls Housing Finance NCD offer high interest rates. Banks are offering low interest rates, hence investors would get tempted with such NCDs. Indiabulls Housing NCD rating is AA by CRISIL Ratings and Brickworks Ratings which are considered as good rating. However, such credit ratings can further fall in future. High risk investors can invest in these secured NCDs.

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Suresh KP

17 comments

  • Kalyan

    Ridiculous statement by some misinformed soul regarding Suresh. He has been doing an immense job through this blog (a majority of these ‘me too’ blogs have opened & closed long ago), whereas Suresh has been maintaining this with an extreme sense of dignity – his recos on investments are conservative and of course, all investments come with risk

  • Arvind Joshi

    I have lost money in Srei and reliance ncd

  • Srinivasan Nair

    I think Mr Mathur has some grievance with Indiabulls which reflected on his comments with you. If he is so sure that this Company is a bubble gum, then he should explain it with facts and figures.

    I have been following your articles for quite some time and I have no hesitation to say that you are a strict Master (school teacher) who never give more than 50 marks to students – even if they are eligible for 100!! You are one of the least financial experts who after explaining everything in an article recommend “don’t subscrbe”. So don’t get emotional – keep on your good work.

  • Pankaj M

    Mr. Suresh KP, Don’t worry about just 1 negative comment. All your articles are well researched. you not only provide positives, but highlight each and every small risk items too. I still read your last sentence in risk factors “investors should read all risk factors indicated in prospectus”. Earlier I used to wonder why you are providing so many risk items, but later realised your true intention when nbfc co’s are defaulting and delaying payments. You are a true advisor for all us. Keep up the good work.

  • Mathur

    This is the worst possible post for retail investors who trust you and read your posts. are you getting commission from these companies ?
    This is a company that is about to go bankrupt soon.

    • Mathur,

      Did you read the article or just commenting something on your own. We post both positive points and negative points and with a conclusion.

      These are AA rated + Secured NCDs, hence relatively safer to invest. We always re-iterated earlier that investors should invest in AA rated bonds. Yes, the ratings can change and this is indicated as FIRST RISK factor in the post as well as on video. Do not comment without reading the complete article. Please do not try to demotivate bloggers like us who keep educating for each and every new financial products that are coming into market.

      • Andy

        Sir, in your earlier response you have said:

        “We always re-iterated earlier that investors should invest in AA rated bonds.”

        I think you meant *AAA* rated bonds. I know you have always recommended investing in AAA bonds for maximum safety when it comes to debt investments.

        I follow your blog daily and have found your articles and inputs very valuable. Thank you so much for this service to humanity.

        • Hello Andy, Yes I keep indicating AAA / AA and A rated bonds in various articles that investors can invest. The reason is that AAA rated can go down to AA and similarly AA rated can go down to A rating. Even A rating bonds can down to BBB. However, BBB rated bonds can further fall, the risk is v. higher. I am re-iterating again and again earlier and now. NCDs are always high risk, the credit ratings would help investors to know the quantum of risk.

    • Kamal Garg

      I think a very inappropriate, wrong and derogatory remarks about the blog writer, Mr. Suresh KP.
      To my understanding, he has been extremely transparent, candid and offers a good analysis.
      Secondly, no explaination has been offered on what makes this company a soon to be bankrupt company. It is of course not acceptable to make such comments/allegation without any substantive and meaningful evidence for the same.

    • Divyaprakash

      Looks this gentlemen has seen the first 30 seconds of video and made the judgement and critized mr. suresh. U should read the pros and cons briefed in the article and video dude. Do you do same way for your investments, than you are making blunders.

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