8.1% Aditya Birla Finance NCD – Sep-2023 – Details and Review

Aditya Birla Finance is coming up with secured NCD bonds now. These bonds would open for subscription on 27th September, 2023. Aditya Birla Finance is as a non-deposit taking systemically important non-banking financial company. The NCD interest rates for Aditya Birla Finance NCD are up to 8.1%. These NCDs are offered for 3 years, 5 years and 10 years tenure. Interest is paid either monthly or annually or on maturity depending on the option chosen. Should you invest in Aditya Birla Finance NCD Sep-2023 issue? What are the risk factors one should consider before investing in Aditya Birla Finance NCD’s of 2023?

Also Read: 10 Mutual Funds that turned 10K SIP up to Rs 52 Lakhs in 10 years

About Aditya Birla Finance Limited

Company is registered with the RBI as a non-deposit taking systemically important non-banking financial company.

It was incorporated in 1991 and obtained a certificate of registration in 2011 to carry on the business of nonbanking financial institution without accepting public deposits under Section 45IA of the RBI Act, 1934. They have been categorized as an ‘Upper Layer’ NBFC under the scale based regulatory framework for NBFCs introduced by the RBI, with effect from September 30, 2022.

They offer end-to-end lending, financing and wealth services to retail, HNI, ultra HNI, micro, small and medium enterprises, small and medium enterprises  and corporate customers. As of June 30, 2023, they had total loans outstanding of Rs 85,778.5 crore. They have 332 branches and 59,14,504 customers as of June 30, 2023.

Aditya Birla Finance NCD issue – Sep-2023

Here are the issue details.

Subscription opening Date 27-Sep-23
Subscription closure Date 12-Oct-23
Issuing Security Name Aditya Birla Finance Limited
Security Type Secured, Rated, Listed, Redeemable, Non-Convertible Debentures
Issue Size (Base) Rs 1,000 Crores
Issue Size (Option to retain over subscription) Rs 1,000 Crores
Total issue size Rs 2,000 Crores
Issue price Rs 1,000 per bond
Face value Rs 1,000 per bond
Series I to VII
Minimum Lot size 10 bonds and 1 bond there after
Tenure 24, 36 and 60 months
Interest Payment frequency Monthly and Annuallly
Listing on Within 6 working days on BSE/NSE
Lead Manager Trust Investment Advisors Private Limited, A. K. Capital Services Limited*
, JM Financial Limited and Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited)
Debenture Trustee/s Vistra ITCL (India) Limited

Aditya Birla Finance NCD Interest Rates – Sep-2023 Issue

Frequency of Interest Payment Annual Cumulative Annual Cumulative Monthly Annual
Tenure (Years) 3 Years 3 Years 5 Years 5 Years 10 Years 10 Years
Coupon (% per Annum) 8.00% NA 8.05% NA 7.80% 8.10%
Effective Yield (% per Annum) 7.99% 7.99% 8.04% 8.04% 8.08% 8.09%
Amount on Maturity (In Rs.) 1,000 1,259 1,000 1,472 1,000 1,000

What are the credit ratings for these NCDs?

Aditya Birla Finance NCD rating is assigned as IND AAA Outlook Stable by India Ratings and [ICRA]AAA (Stable) by ICRA.

Instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk

How is the company doing in terms of profits?

Its consolidated profits are as below:

  • FY2022 – Rs 1,108.33 Crores
  • FY2023 – Rs 1,553.75 Crores

Why to invest in these NCDs?

  • Aditya Birla Finance NCDs offer good interest rates where investors can get interest up to 8.1% per annum.
  • Aditya Birla Finance generates consistent margins. This means that company has ability to pay interest payment on time to its NCD holders without any delay.
  • It issues secured NCDs. Its secured NCDs are safe compared to unsecured NCDs. In case a 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.

Why not to invest in these NCDs?

  • Investing in NBFC company NCDs are riskier. Check what happened in the past. While some companies defaulted investors money, some NBFC companies have delayed payment of interest and repayment of capital.
  • Small finance banks are offering similar FD interest rates along which comes with deposit insurance up to Rs 5 Lakhs. Then why investors should take risk and invest in these NCDs?
  • Company require substantial capital for business and any disruption in sources of capital or an increase in its average cost of borrowings could have an adverse effect on its business, results of operations and financial condition.
  • They are affected by volatility in interest rates and other market conditions, which could materially and adversely impact business, prospects, financial condition, results of operations and cash flows.
  • Refer NCD prospectus for complete risk factors.

How to invest in Aditya Birla Finance NCD Online?

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.

How safe is Aditya Birla Finance NCD?

These NCD bonds are rated as AAA by Ind Ratings and ICRA. Such credit rating carry low credit risk. Hence it is safe to invest in these NCDs.

Also Read: 5 Mutual Funds that turned 10K SIP between 1.6 to 1.9 Crores in 20 years

Should you invest in Aditya Birla Finance NCD?

These NCDs provide opportunities and also comes with several risks.

  • Aditya Birla Finance NCD of Sep-2023 issue offers good interest rates. These NCDs are rated as AAA by Ind Ratings and ICRA, which are considered as good. Since these are secured NCDs, these are safe too.
  • On the other side, such credit ratings can change in future without any advance intimation. The interest rates offered are low compared to the risks involved. Even small finance banks offering similar interest rates which comes with deposit insurance up to Rs 5 Lakhs. Investors should not forget about some of the NBFC companies delaying the interest as well principal re-payments in the past.

High risk investors who are okay with the interest rates offered can invest in these NCDs after understanding all these risk factors.

Suresh KP


  1. What frequency of Interest Payment would be better from a taxation perspective? Annual/Cumulative/Monthly/Quarterly/half yearly

  2. (1) I think the interest rate is quite low at 8.05% (annual payout) for 60 months even if the company is a AAA rated one.
    (2) Whether the net profit of Rs. 1553 crores for FY 2023 is of Aditya Birla Finance Ltd. or the consolidated profit of its parent company i.e. Aditya Birla Capital Ltd.

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