Non-Convertible Debentures (NCDs) have become an attractive investment avenue for those seeking fixed returns. The Edelweiss Financial Services NCD December 2024 issue, launched by Edelweiss Financial Services Limited (EFSL), aims to raise funds up to ₹ 200 Crores with a base size of ₹ 100 Crores and an additional green shoe option.
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About Edelweiss Financial Services
Established in 1995, Edelweiss Financial Services Limited is a leading financial services group in India. The company operates across various segments, including credit, wealth management, and insurance. With its headquarters in Mumbai, EFSL has built a strong reputation in delivering innovative financial solutions.
Edelweiss Financial Services NCD December 2024 – Issue Details
| Issue Open | January 7, 2025 – January 20, 2025 |
| Security Name | Edelweiss Financial Services Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | ₹ 100.00 Crores |
| Issue Size (Oversubscription) | ₹ 100.00 Crores |
| Overall Issue Size | ₹ 200.00 Crores |
| Issue Price | ₹ 1000 per NCD |
| Face Value | ₹ 1000 each NCD |
| Minimum Lot size | 10 NCD |
| Market Lot | 1 NCD |
| Listing At | BSE |
| Credit Rating | CRISIL A+/Watch Negative by CRISIL Ratings Limited. |
| Tenor | 24, 36, 60 and 120 Months |
| Series | Series I to XII |
| Payment Frequency | Monthly and Annually |
| Basis of Allotment | First Come First Serve Basis |
| Debenture Trustee/s | Beacon Trusteeship Limited |
Interest Rates and Tenor
| Particulars | I | II | III | IV | V | VI | VII | VIII | IX | X | XI | XII |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Frequency of Interest Payment | Annual | NA | Monthly | Annual | NA | Monthly | Annual | NA | Annual | Monthly | Annual | Annual |
| Nature | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured |
| Tenor | 24 Months | 24 Months | 36 Months | 36 Months | 36 Months | 60 Months | 60 Months | 60 Months | 60 Months | 120 Months | 120 Months | 120 Months |
| Coupon (% per Annum) | 9.5% | NA | 9.57% | 10% | NA | 10.04% | 10.5% | NA | 10.5% | 10.49% | 11% | 11% |
| Effective Yield (% per Annum) | 9.5% | 9.5% | 10% | 10% | 10% | 10.51% | 10.49% | 10.5% | 10.5% | 11% | 10.99% | 10.99% |
| Amount on Maturity (In ₹.) | ₹ 1,000 | ₹ 1,199.1 | ₹ 1,000 | ₹ 1,000 | ₹ 1,331 | ₹ 1,000 | ₹ 1,000 | ₹ 1,647.9 | ₹ 1,000 | ₹ 1,000 | ₹ 1,000 | ₹ 1,000 |
Credit Ratings
The NCDs have been assigned a credit rating of CRISIL A+/Negative by CRISIL Ratings Limited. This indicates an adequate degree of safety regarding timely financial obligation servicing but also highlights potential risks【5†source】.
Financial Health of Edelweiss Financial Services
| Period Ended (₹ Crores) | 31 Mar 2024 | 31 Mar 2023 |
|---|---|---|
| Assets | 42,919.57 | 44,064.27 |
| Revenue | 8,632.59 | 9,601.58 |
| Profit After Tax | 405.56 | 528.05 |
| Reserves and Surplus | 6,442.88 | 4,377.81 |
| Total Borrowing | 2,588.65 | 20,248.42 |
Reasons to Invest in Edelweiss Financial Services NCD December 2024
- Attractive Returns: Higher yields compared to traditional fixed deposits.
- Secured Nature: These NCDs are backed by adequate collateral, offering an additional layer of security.
- Regular Income: Flexible interest payment schedules suit different investor needs.
- Listing Benefits: Being listed on the BSE provides liquidity, allowing investors to trade in secondary markets.
Risk Factors
- Credit Risk: Despite an “A+” rating, the “Negative” outlook indicates potential vulnerabilities.
- Market Risk: Interest rate fluctuations could impact the value of the NCDs.
- Liquidity Risk: While listed, the trading volume of such NCDs can vary, impacting liquidity.
- Company-Specific Risks: Any deterioration in EFSL’s financial position could impact its ability to honor obligations.
How to Invest in Edelweiss Financial Services NCD December 2024?
- Application Process:
- Retail investors can apply through the ASBA (Application Supported by Blocked Amount) process.
- Applications can be submitted via physical forms at designated collection points or online through participating brokers.
- Demat Account: A demat account is required to hold these securities.
- Minimum Investment: Typically starts at ₹10,000, increasing in multiples of ₹1,000.
Also Read: Emergency Fund – How to create, manage and invest in best investment options?
Edelweiss Financial Services NCD December 2024 – Should You Invest?
Edelweiss Financial Services NCDs offer a blend of attractive returns and moderate risks. While the secured nature and competitive coupon rates are attractive, investors should carefully re-assess the credit rating outlook and their own risk appetite.
If you aim for higher yields with a medium-term horizon and are comfortable with the associated risks discussed above, these NCDs could be a good addition to your investment portfolio. However, conservative investors might prefer other options like government bonds or high-rated corporate FDs.
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