Edelweiss Financial Services NCD issue would open for subscription on 6th December 2021. Edelweiss Financial Services is a leading investment banking company which has diversified businesses across retail, corporate credit, wealth management etc. NCD interest rates are up to 9.7%. These NCDs are offered for the tenure of 24 months, 36 months, 60 months and 120 months. Interest on these NCDs are paid either monthly, annually or on maturity depending on the option chosen by an investor. Should you invest in Edelweiss Financial Services NCD’s? What are the risk factors one should consider before investing in such high risk NCDs? Let me provide Edelweiss Financial NCD review in this article.
About Edelweiss Financial Services Limited
This investment banking company, through its subsidiaries has diversified its businesses to include credit, including retail and corporate credit, wealth management, asset management, asset reconstruction and insurance including life and general insurance businesses, which are conducted through its subsidiaries. They believe that its research driven and client-centric approach and consistent ability to capitalize on emerging market trends has enabled them to foster strong relationships across corporate, institutional (both domestic and international), high net worth individuals and retail clients. They have a pan-India and international network with approximately 226 offices, including 7 international offices, in approximately 145 cities in India and six international locations and employed over 5,600 employees excluding EWM and EGBIL offices and employees
Edelweiss Financial Services NCD December 2021 – Issue Details
Edelweiss Financial NCD issue opens on Monday, 6th December, 2021 and closes on Monday 27th December, 2021.
These NCDs are issued in 10 different series. The tenures for these NCDs are for 24 months, 36 months, 60 months and 120 months.
Edelweiss Financial Services NCD interest rates are up to 9.7% for retail investors.
These are secured NCDs.
Edelweiss NCD interest payment is payable monthly, annually or on maturity depending on the series chosen by the NCD investor.
The face value of the NCD bond is Rs 1000.
Minimum investment is for the 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 within 6 working days from the issue closure date. Hence these are liquid investments provided buyer is available.
These are allotted on first come first serve basis. Hence the issue can be closed before this date if it is oversubscribed before the closure date.
NRI’s cannot apply to this NCD subscription.
The base issue size for this issue is Rs 200 Crores with an option to retain over subscription up to Rs 300 Crores totaling to Rs 500 Crores.
Equirus Capital Private Ltd is the lead manager for the issue.
Edelweiss Financial Services Limited NCD – Dec 21 – Tranche-1 prospectus
Interest rates of Edelweiss Financial Services – December, 2021 NCD
Edelweiss Financial Services NCD Rating
These NCDs are rated as Acuite AA/Negative and CRISIL AA-/Negative. NCD instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
Edelweiss Financial NCD issue breakup
This NCD issue is open to all Indian residents, HUFs, HNIs and Institutions.
Category I – Institutional Investors – 10% of the overall size is reserved.
Category II – Non-Institutional Investors (including companies) – 10% of the overall size is reserved.
Category III – HNIs – 40% of the overall size is reserved.
Category IV – Retail Investors – 40% of the overall size is reserved.
How is the company doing in terms of profits?
Here are the details of standalone profits of the company.
Year ending Mar-2019 – Profit of Rs 102.8 Crores
Year ending Mar-2020 – Profit of Rs 82.5 Crores
Year ending Mar-2021 – Profit of Rs 716.2 Crores
Why to invest in these Edelweiss Financial Services NCD?
Let us review the positive factors in this NCD issue.
1) This NCD offer attractive interest rates where investors can get interest up to 9.7% per annum.
2) It issues secured NCDs. Its 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) It generates consistent profits in the last 3 years (standalone). However, one should note that its consolidated nos show they incurred losses in FY20. Investing in consistent profit making companies would help NCD interest to get seamless interest payments and repayment of their capital.
Why not to invest in Edelweiss Financial Services NCD?
Let us review some of the negative factors or risk factors in this NCD issue.
1) The financial industry is becoming increasingly competitive. This creates significant pricing pressures for such companies to retain existing customers and get new business. Its growth will depend on its ability to compete effectively in this environment.
2) Current difficult conditions in financial markets can adversely affect its business, which could materially reduce its revenue and income.
4) Refer prospectus for complete risk factors.
How to apply Edelweiss Financial Services 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 having a demat account. Application forms can be downloaded on the lead manager web site. For more information on this you can refer prospectus.
Is Edelweiss NCD Safe for investment?
Investors might be thinking whether it is safe to invest in these NCDs?
These NCD’s offer high interest rates. Banks are offering low interest rates, hence investors would get tempted with such NCDs that are offering high interest rates. These NCDs are rated as Acuite AA/Negative by Acuite Ratings and CRISIL AA-/Negative by CRISIL Ratings. However, such credit ratings may change in future without any notice. Like I indicated earlier, investors should always invest in A rated NCDs if they are looking for safe NCD investments. High risk investors can invest in these secured NCDs and get high returns.
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