11.5% Chemmanur Credits and Investments NCD Bonds – Oct-2023

Chemmanur Credits and Investments is coming up with secured NCD bonds now which would open for subscription on October 16, 2023. Chemmanur Credits and Investments is a non deposit taking NBFC company in India. The NCD interest rates for Chemmanur Credits and Investments NCD are up to 11.5% and yield is up to 11.9%. These NCDs are offered for 366 days to 74 months tenure. These interests are paid either monthly or on maturity. Should you invest in Chemmanur Credits and Investments NCD issue of October, 2023?

About Chemmanur Credits and Investments Limited

Company is a non-deposit taking, non-banking financial company registered with the RBI.

It is primarily engaged in the gold loan sector lending money against the pledge of household gold jewellery in the state of Kerala, Tamil Nadu, Karnataka Andhra Pradesh and Maharashtra.

They also provide Microfinance Loans, business and personal loans, money transfer services and distribution of third party insurance products. They have been engaged in the lending business for more than 13 years and are based in Kerala, India. As of September 30, 2023, they operated through 222 branches located across 5 states namely Kerala, Tamil Nadu, Karnataka, Maharashtra and Andhra Pradesh managed through its registered office located at Thrissur, Kerala and they employ 1,172 persons in its business operations.

Chemmanur Credits and Investments NCD Oct-2023 – Issue Details

Here are the NCD issue details.

Subscription opening Date 16-Oct-23
Subscription closure Date 30-Oct-23
Issuing Security Name Chemmanur Credits and Investments Limited
Security Type Secured, Redeemable and Non-Convertible 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 VIII
Minimum Lot size 10 bonds and 1 bond there after
Tenure 366 days, 18, 24, 36, 60, 12 and 74 months
Interest Payment frequency Monthly and Cumulative
Listing on Within 6 working days on BSE
Lead Manager Vivro Financial Services Private Limited
Debenture Trustee/s Mitcon Credentia Trusteeship Services Limited

Chemmanur Credits Oct-2023 NCD Prospectus Link

Chemmanur Credits and Investments NCD Interest Rates – Oct-2023

Series I II III IV V VI VII VIII
Frequency of Interest Payment Monthly Monthly Monthly Monthly Monthly Cumulative Cumulative Cumulative
Tenure (months) 366 Days 18 24 36 60 12 24 74
Coupon (% per Annum) 9.50% 10.50% 10.75% 11.00% 11.50% NA NA NA
Effective Yield (% per Annum) 9.92% 11.02% 11.30% 11.57% 12.13% 9.50% 10.75% 11.90%
Amount on Maturity (In Rs.) 1,000 1,000 1,000 1,000 1,000 1,095 1,227 2,000

What are the credit ratings for these NCDs?

These NCDs have been rated as CRISIL BBB-/Stable by CRISIL Ratings which indicate that instruments with this rating are considered to have a moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk.

How is the company doing in terms of profits?

Here are the details of the profits of the company as per latest RHP of Oct-2023.

Why to invest in these NCDs?

  • These Chemmanur Credits NCDs offer attractive interest rates where investors can get interest up to 11.5% per annum and yield up to 11.9%.
  • It issues secured NCDs. These NCDs are safe compared to any other 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?

  • Chemmanur Credits and Investments profits are in declining mode. It incurred loss for Qtr ending Jun-23 too.
  • Company has a credit rating of BBB-Stable. Investors should always invest A / AA / AAA rated NCD, which is little safer compared to these bonds.
  • Such NBFC companies are subject to RBI inspection and any adverse action can affect the business.
  • Refer prospectus for complete risk factors.

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 Chemmanur Credits NCD Bonds of Oct-23 issue?

These NCDs offer high interest rates up to 11.5% and yield works out to 11.9%.  These interest rates are attractive.

On the other hand, the company has a BBB credit rating, which is considered as a low credit rating. Also company profits are on declining mode. Investors should not forget about NBFC’s that defaulted investors on NCD payments and companies which have delayed or delaying NCD interest payments to its investors.

Like I always indicated earlier, investors should invest in A / AA / AAA rated NCD bonds, which are little safe compared to low credit rating bonds while the risk is not 100% eliminated.

Personally, I would like to avoid such NCD bonds for now.

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