10.64% Edelweiss ECL Finance Secured NCD-Feb/Mar-2015

ECL Finance Secured NCD Feb Mar 201510.64% Edelweiss ECL Finance Secured NCD-Feb/Mar-2015

In Jun-2014, Edelweiss ECL Finance has issued un-secured NCD’s offering up to 12% interest rates. Now ECL Finance Limited is coming up with a public issue of Secured NCD to the tune of Rs 400 Crores with an option to retain another Rs 400 Crores aggregating to total issue of Rs 800 Crores. These NCD’s provide attractive interest rates and yield works out to be 10.64% per annum. Should you invest in Edelweiss ECL Finance NCD of Feb-2015? What are its latest NCD features and what risks are involved if we invest in Edelweiss Finance NCD of Feb-2015.

About Edelweiss ECL Finance Limited

ECL Finance Limited is the Non Banking Finance Company (NBFC) arm of Edelweiss Financial Services which is into lending and investments.

Also Read: Should we invest in high yield fixed deposits like PNB HFL Which offers 15% yield per annum?

Features of Edelweiss Finance NCD Feb-2015

  • Issue start date: 26-Feb-2015
  • Issue end date:16-Mar-2015
  • NCD’s are available in 3 different options.
  • Interest payable monthly, annual or at maturity depending on the option of NCD.
  • Face value of the NCD bond is Rs 1,000.
  • Minimum investment is for 10 bonds means, you need to invest for a minimum of Rs 10,000. Beyond this you can invest in multiples of 1 bond.
  • These NCD bonds would be listed on BSE and NSE. Hence, these are liquid investments.
  • NRI’s cannot apply to this NCD subscription
  • NCD ratings 'CARE AA' by Care and 'ICRA AA (Outlook: Stable)' by Brickwork

Draft Prospectus can be downloaded from BSE website here Or at NCD Prospectus from Edelweiss website

Below are the Interest rates details.

ECL Finance Secured NCD Feb 2015

Detailed Terms of issue are indicated below

ECL Finance Secured NCD Feb 2015-Terms of the issue

How is company doing in terms of profits?

Its profits are as below:

  • Year ended Mar-2012 – Rs 68.63 Crores
  • Year ended Mar-2013 – Rs 46.79 Crores
  • Year ended Mar-2014 – Rs 73.29 Crores

Why to invest?

  • Company is earning good profits in the last few years.
  • Attractive interest rates of 10.6% per annum. Annualised yield for per month interest payment works out to be 10.64%.
  • This is secured NCD issue. In case of any non performance of company and company gets closed for some reason, NCD investors would get preference in repayment of capital along with interest. Hence it is safe to invest in such secured NCD options. However, it is only preference is given to NCD investors and no guarantee that entire amount would be paid-back in such cases.

Also Read: Is Post Office Monthly Income Scheme is best scheme to get regular monthly income?

Why not to invest?

  • Net NPA’s increased from Rs 7.45 Crores (as on Mar-2013) to Rs 20.86 Crores (as on Mar-2014). Increased NPA’s would wipe-off some of the profits of the company.
  • Capital adequacy ratio as per RBI limit should be 15%. It has 18% as on Mar-2013 and actual as on 31-Mar-2014 is 16%. Though it is within RBI limit, decline in the capital adequacy ratio restricts future business growth.

How to apply?

You can apply online with any of the broker where you are maintaining a demat account. You can also directly call Edelweiss ECL Finance company and fill online form or physical forms.

Conclusion: These NCD’s are secured in nature. Though it carries some element of risk, they are secured. I always advise investors to park money in securing NCD’s as they are safer compared to unsecured NCD’s. Banks have been reducing interest rates in the last few months. If you are a risk taker, you can invest some money in such high interest rate investment options.

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Edelweiss ECL Finance Secured NCD-Feb-2015

Suresh KP

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