Edelweiss Financial Services NCD July-2023 Tranche III issue would open for subscription on 4th July, 2023. 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 10.45%. These NCDs are offered for the tenure of 24 months, 36 months, 60 months and 120 months. Interest on these NCDs is paid either monthly, annually or on maturity depending on the option chosen by an investor. Should you invest in Edelweiss Financial Services NCD’s of July, 2023 issue? What are the risk factors one should consider before investing in such high risk NCDs?
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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.
Edelweiss Financial Services NCD – July-2023 – Issue Details
Here are the issue details of Tranche-III NCD.
| Opening Date | 04-Jul-23 |
| Closure date | 17-Jul-23 |
| Security Type | Secured, Redeemable and Non-Convertible NCDs |
| Issue Size (Base) | Rs 300 Crores |
| Issue Size (Shelf) | Rs 1,000 Crores |
| Issue price | Rs 1,000 per bond |
| Face value | Rs 1,000 per bond |
| Minimum Lot size | 10 bonds and 1 bond there after |
| Tenure | 24 to 120 months |
| Interest Payment frequency | Monthly, annual or on maturity |
| Listing on | Within 6 working days on BSE |
Interest Rates of Edelweiss Financial NCD Jul-2023
| Series | I | II | III | IV | X | VI | VII | VIII | IX | X |
|---|---|---|---|---|---|---|---|---|---|---|
| Frequency of Interest Payment | Annual | NA | Monthly | Annual | NA | Monthly | Annual | NA | Monthly | Annual |
| Tenor (in months) | 24 | 24 | 36 | 36 | 36 | 60 | 60 | 60 | 120 | 120 |
| Coupon (% per Annum) | 8.95% | NA | 9.20% | 9.60% | NA | 9.67% | 10.10% | NA | 10.00% | 10.45% |
| Effective Yield (% per Annum) | 8.94% | 8.95% | 9.59% | 9.59% | 9.60% | 10.10% | 10.09% | 10.10% | 10.46% | 10.44% |
| Amount on Maturity (In Rs.) | 1,000 | 1,187 | 1,000 | 1,000 | 1,317 | 1,000 | 1,000 | 1,619 | 1,000 | 1,000 |
Why to invest in Edelweiss Financial Services Ltd NCD?
Let us review the positive factors in this NCD issue.
1) This NCD offers attractive interest rates where investors can get interest up to 10.45% per annum.
2) It issues secured NCDs. Its secured NCDs are safe compared to 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.
3) These NCDs are rated as Acuite AA-/Negative and CRISIL AA-/Negative. NCD instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
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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) Company consolidated revenues have fallen in FY2022 compared to previous years. However, for FY23 we could see a good improvement.
2) High levels of customer defaults and the resultant non-performing assets could adversely affect its business, financial condition, results of operations and future financial performance.
3) Refer Edelweiss Financial Services Jul-23 NCD prospectus for complete risk factors.
Is Edelweiss Financial Services NCD Safe for investment?
These NCD’s offer high interest rates. Though these days, banks have increased the FD interest rates; however, these are still low compared to the interest rates offered in these NCDs. These NCDs are rated as Acuite AA-/Negative by Acuite Ratings and CRISIL AA-/Negative by CRISIL Ratings. Also, secured NCD bonds are relatively safer compared to unsecured bonds while risk is not eliminated.
On the other hand, credit ratings may change in future. In the last 5 years, company revenues have fallen and margins are shrinking, however, started regaining now from FY23. One should not forget about NBFC companies defaulting on NCD investor’s payments in the last few years.
High risk investors who understand all these risk factors can invest in these NCDs. However, investors can avoid long term NCD bonds of 120 months and opt for short to medium tenure bonds as we do not know how such companies would turn in the long term.
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Sir,
Is there any way to find out credit ratings in the last 5 years or so, so as to fully understand the implications of changing credit ratings and its impact on the interest rate and fund raising.
As per my knowledge we do not have any database Kamalji. One way is you can use search option on our blog which can list NCD’s with dates and you can check older date NCD’s and the rating details in them.