Cholamandalam Investment and Finance NCD Nov-2023 – Introduction
The Cholamandalam Investment and Finance NCD issue is scheduled to open on November 28, 2023. Cholamandalam Finance provides vehicle loans, home loans, SME loans, etc. It offers NCDs with tenures of 24, 36, and 60 months. Should you invest in the Cholamandalam Investment and Finance NCD Nov-2023/Dec 2023? What are the risk factors one should consider before investing in the Cholamandalam NCD 2023.
Also Read: List of Mutual Funds to invest to earn one Crore in 10 years
About Cholamandalam Investment and Finance Limited
Cholamandalam Investment and Finance Company Limited is a part of the Murugappa Group, offering a range of financial services including vehicle finance, home loans, home equity loans, SME loans, investment advisory services, and stock broking.
Cholamandalam Finance has 1166+ branches across India, with Assets Under Management (AUM) exceeding Rs 1,03,789 Crores. It serves over 21 lakh customers spanning across India
Cholamandalam Investment and Finance NCD Nov-2023 Issue Details
Here are the details for the Cholamandalam Investment Tranche III Nov-2023 NCD issue.
| Subscription opening Date | 28-Nov-23 |
| Subscription closure Date | 11-Dec-23 |
| Issuing Security Name | Cholamandalam Investment and Finance Company Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | Rs 500 Crores |
| Issue Size (Option to retain over subscription) | Rs 500 Crores |
| Total issue size | Rs 1,000 Crores |
| Issue price | Rs 1,000 per bond |
| Face value | Rs 1,000 per bond |
| Series | Series I to VI |
| Minimum Lot size | 10 bonds and 1 bond there after |
| Tenure | 24, 36 and 60 Months |
| Interest Payment frequency | Annually and Cumulative |
| Listing on | Within 6 working days on BSE |
| Lead Manager | A.K. Capital Services Limited |
| Debenture Trustee/s | IDBI Trusteeship Services Ltd. |
Cholamandalam Investment and Finance NCD Nov-2023 – Interest Rates
| Series | I | II | III | IV | V | VI |
|---|---|---|---|---|---|---|
| Frequency of Interest Payment | Annual | Cumulative | Annual | Cumulative | Annual | Cumulative |
| Tenure (Months) | 24 | 24 | 36 | 36 | 60 | 60 |
| Coupon (% per Annum) | 8.40% | NA | 8.50% | NA | 8.60% | NA |
| Effective Yield (% per Annum) | 8.39% | 8.40% | 8.49% | 8.50% | 8.59% | 8.60% |
| Amount on Maturity (In Rs.) | 1,000.00 | 1,175.32 | 1,000.00 | 1,277.58 | 1,000.00 | 1,511.28 |
NCD Ratings
Cholamandalam Investment NCDs are rated as [ICRA] AA+/Stable by ICRA Limited and IND AA+/Stable by India Ratings and Research.
- Securities with this rating are considered to have an adequate degree of safety regarding the timely servicing of financial obligations.
- Such securities carry low credit risk.
- Investors should understand that these NCD credit ratings can change in future.
How is the company doing in terms of profits?
Its consolidated profits are as below:
- FY2020 – Rs 1,054 Crores
- FY2021 – Rs 1,521 Crores
- FY2022 – Rs 2,158 Crores
- FY2023 – Rs 2,676 Crores
Cholamandalam Investment and Finance NCD Nov-2023 – Why to invest?
- These NCDs offer competitive interest rates of up to 8.6% per annum.
- The company’s margins have been improving year on year, reducing default risks for NCD investors.
- These are secured NCDs. I always advise investors to consider secured NCDs, as in the event of the company winding up or shutting down for any reason, investors would still receive preferential treatment in the repayment of capital.
Also Read: ICL Fincorp NCD Nov-2023 issues offers 12.5% Interest Rate
Cholamandalam Investment and Finance NCD Nov-2023 – Risk Factors
- Currently, SFB banks are offering similar interest rates; hence, the Cholamandalam Investment and Finance NCD issue may not be as attractive.
- The company might face disruption in its sources of funding, which can affect its growth.
- The company’s growth prospects depend on the overall Indian automotive market, particularly the demand for LCVs, HCVs, cars, and MUVs. Any downtrend in these segments can impact the company’s performance.
- Volatility in interest rates and other market conditions could materially and adversely impact its business, prospects, financial condition, results of operations, and cash flows.
- Refer to the Cholamandalam NCD Nov-2023 NCD prospectus for complete risk factors.
Cholamandalam Investment and Finance NCD Nov-2023 – Should you invest or Avoid?
The Cholamandalam Investment and Finance NCD issue offer high-interest rates. These NCDs are rated as AA+ by ICRA and India Ratings. They offer short to medium-term tenure NCDs, which are good for investment. Additionally, these are secured NCDs.
On the other side, small finance banks are offering similar interest rates on FD schemes. There are risks involved in investing in NBFC company NCDs, which I consistently highlight in these reviews.
High risk investors who understand all these pros and cons can consider investing in these NCDs.
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