ICL Fincorp Limited (originally incorporated as Jawahar Finance Limited) is coming up with secured NCD bonds, opening for subscription on January 8, 2025. This article provides insights into the issue details, interest rates, pros, cons, and whether you should invest or not.
About ICL Fincorp Limited
ICL Fincorp Limited is a non-deposit-taking, base-layer non-banking finance company (NBFC) specializing in the gold loan sector. The company operates in multiple states, including Kerala, Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, Odisha, Gujarat, and Maharashtra.
In addition to gold loans, the company offers loans against property, business loans, and personal loans.
- Gold Loan Portfolio: As of June 30, 2024, its gold loan portfolio accounted for 98.77% of total loans and advances on a standalone basis.
- Branch Network: As of September 30, 2024, the company had a network of 295 branches, primarily in southern and western India.
ICL Fincorp NCD January 2025 – Issue Details
The ICL Fincorp NCD January 2025 issue is offering secured NCDs with attractive interest rates and multiple tenure options.
| Opening Date | 08-Jan-25 |
| Closure date | 21-Jan-25 |
| Issuing Security Name | ICL Fincorp Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | ₹ 50 Crores |
| Oversubscription | ₹ 50 Crores |
| Total Issue Size | ₹ 100 Crores |
| Issue price | ₹ 1,000 per bond |
| Face value | ₹ 1,000 per bond |
| Minimum Lot size | 10 bonds and 1 bond there after |
| Tenure | 13, 24, 36, 60 and 68 Months |
| Series | Series I to X |
| Interest Payment frequency | Monthly and Cumulative |
| Listing on | Within 6 working days on BSE |
| Lead Manager | Vivro Financial Services Private Limited |
| Debenture Trustee/s | Mitcon Credentia Trusteeship Services Limited |
The NCDs are secured, meaning investors receive priority in repayment in the event of financial difficulty.
ICL Fincorp NCD January 2025 – Interest Rates
Below are the interest rate details for the January 2025 NCD issue:
| Series | Frequency of Interest Payment | Tenor (in months) | Coupon (% per Annum) | Effective Yield (% per Annum) | Amount on Maturity (₹) |
|---|---|---|---|---|---|
| I | Monthly | 13 | 11.00% | 11.57% | 1,000.00 |
| II | Monthly | 24 | 11.50% | 12.13% | 1,000.00 |
| III | Monthly | 36 | 12.00% | 12.68% | 1,000.00 |
| IV | Monthly | 60 | 12.50% | 13.24% | 1,000.00 |
| V | Cumulative | 13 | NA | 11.55% | 1,125.16 |
| VI | Cumulative | 24 | NA | 12.36% | 1,254.40 |
| VII | Cumulative | 36 | NA | 13.03% | 1,423.83 |
| VIII | Annual | 24 | 11.75% | 11.75% | 1,000.00 |
| IX | Annual | 36 | 12.25% | 12.25% | 1,000.00 |
| X | Cumulative | 68 | NA | 13.73% | 2,000.00 |
Promoters of ICL Fincorp Limited
The promoters of ICL Fincorp Limited are Kuzhuppilly Govinda Menon Anilkumar and Umadevi Anilkumar, who bring significant experience in the NBFC and gold loan sectors.
ICL Fincorp NCD January 2025 – Positives
- High-Interest Rates: The NCDs offer attractive interest rates up to 12.5% (effective yield of 13.73%), which are higher than most fixed-income instruments.
- Secured Investment: These are secured NCDs, meaning investors have a better chance of recovering their investment in case of a financial crisis.
- Revenue Growth: The company has consistently shown growth in revenue and margins, supported by a strong presence in the gold loan sector.
- Branch Network: With 295 branches, the company has a widespread presence, especially in southern and western India.
ICL Fincorp NCD January 2025 – Risks
- Low Credit Rating: The NCDs are rated CRISIL BBB-/Stable, which is considered a low rating. This indicates moderate risk of default.
- Dependency on Gold Loans: A volatility in gold prices could adversely affect the company’s financial performance. Additionally, RBI restrictions on lending against gold collateral may pose challenges.
- Capital Adequacy Ratio: A decline in the company’s capital adequacy ratio could restrict its future growth and ability to raise funds.
- Historical Risk with NBFC NCDs: There have been instances of defaults and delays in payments by NBFCs in the past, which make such investments inherently riskier.
Should You Invest in ICL Fincorp NCD January 2025?
- ICL Fincorp’s NCD issue is an attractive option for investors seeking higher returns with interest rates up to 12.5% (effective yield of 13.73%). Additionally, secured NCDs offer a safety buffer compared to unsecured bonds.
- However, the low credit rating (CRISIL BBB-/Stable) and risks associated with gold price volatility make this a moderate-risk investment.
- This NCD issue is suitable for investors with a high-risk appetite, looking for better returns than fixed deposits and other debt instruments.
- For detailed risk factors, refer to the ICL Fincorp NCD Jan-2025 Prospectus.
FAQs
1) What is the minimum investment amount for ICL Fincorp NCDs?
The minimum investment is ₹10,000 (10 NCDs).
2) What is the highest yield in this NCD issue?
3) The highest effective yield is 13.73% (Series X – Cumulative, 68 months).
4) Are these NCDs secured?
Yes, the NCDs are secured, offering priority in repayment during financial distress.
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