8.75% IIFL Home Finance NCD Issue Opens on 8th December, 2021

IIFL Home Finance NCD Issue Opens on 8th December, 2021 - Interest rates and issue detailsIIFL Home Finance NCD – Dec-2021 – Issue Details, Interest Rate and Risk Factors

IIFL Home Finance has come up with Tranche II of the secured NCD bond issue that would open for subscription on December 8, 2021. IIFL Home Finance Limited is the leading NBFC company in India. IIFL Home Finance NCDs offer interest rates are up to 8.75%. These bonds are issued in 8 different series and for a tenure of 36 to 84 months. Should you invest in IIFL Home Finance NCDs of December 2021? What are the risk factors one should consider before investing in such high risk NCDs?

Also Read: Edelweiss Financial Services NCD Dec-21 issue offers 9.7% Yield

About IIFL Home Finance Limited

IIFL Home Finance is retail focused housing finance company with a focus on providing loans to first time home buyers in the EWS and LIG segment in the suburbs of Tier 1 cities, Tier 2 cities and Tier 3 cities in India where the collateral is a proposed self-occupied residential property. They serve salaried and self-employed customers who account for 44.37% and 55.63% of AUM as of March 31, 2021, respectively. They have served over 141,000 customers as of March 31, 2021.

It offer customers a range of mortgage-related loan products, including (i) housing loans, for purchase of ready built residential units, under construction property by approved builders, self-construction, home improvement on pre-owned property and purchase of land for construction of residential property; (ii) secured business loans, for primarily meeting working capital requirement, business use and purchase of commercial property; and (iii) affordable housing project loans, to meet construction expenses of affordable housing projects of reputed developers. Housing loans secured business loans and affordable housing project loans contribute 69.78%, 26.00% and 4.22% of our AUM, as of March 31, 2021, respectively.

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Features of IIFL Home Finance NCD – Dec-21 – Tranche II

IIFL Home Finance NCDs would open for subscription on Wednesday 8th December 2021 and closes on Tuesday 28th December 2021. These are allotted on first come first serve basis.

NCD’s are available in the 8 series.

It offers NCD bonds for 36 months to 84 month tenure.

Coupon interest rates are between 8.2% to 8.75%. The yield is up to 8.76%.

These are secured NCDs.

Interest payable monthly, yearly and on maturity depending on the option 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. Hence, these are liquid investments.

NRI’s cannot apply to this NCD subscription.

The base issue size is Rs 100 Crores with an option to retain over subscription up to Rs 900 Crores totaling to Rs 1,000 Crores.

Edelweiss Financials, IIFL Securities, ICICI Securities, Trust Investment Advisors and Equirus Capital are the lead managers for the issue.

IIFL Home Finance NCD Prospectus (Dec-21 Tranche II)


Interest rates of IIFL Home Finance NCD – Dec-21

IIFL Home Finance NCD Dec 2021 - Interest Rates and Yield

IIFL Home Finance NCD Credit Ratings in 2021

CRISIL rated these NCDs as AA/Stable and BWR ratings rated them as BWR AA+/Negative (Assigned).

This indicates that instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations and carry very low credit risk.

When these NCD bonds would be listed on stock exchanges?

The NCDs are proposed to be listed on BSE. The NCDs shall be listed within 6 working days from the date of the issue closure.

How is the company doing in terms of profits?

Its restated profits are as below:

Year ended March-2019– Rs 306.3 Crores

Year ended March-2020 – Rs 244.9 Crores

Year ended March-2021 – 401 Crores

Why to invest in these NCDs of IIFL Home Finance?

1) These NCDs offer attractive interest rates where investors can get interest up to 8.75% and yield up to 8.76% per annum.

2) IIFL Home Finance is a leading NBFC company in India.

3) Company is earning consistent profits. Such companies can honor interest payments on time.

4) Company has AA credit ratings from CRISIL and BWR Ratings. Investors should always invest in high rated NCDs which can provide some safety to them.

Why not to invest in these NCDs?

Here are the risk factors of investing in these bonds.

1) The Spread of COVID-19 pandemic and the consequent nationwide lockdown has impact on its operations and financial condition, and it may continue for a few more quarters.

2) The company has experienced significant growth in its business in the recent years, which may or may not continue in future.

3) Refer NCD prospectus for complete risk factors.

Also read: Muthoottu Mini Dec-21 NCD offers up to 10.2% Yield

Should you invest in IIFL Home Finance NCD of Dec-21 issue?

IIFL Home Finance NCDs are AA rated and offers high interest rates up to 8.75%. One should not forget about NBFC crisis that started in 2018. Your interest payment or repayment of capital might get delayed. Secured NCDs offer some safety to investors compared to unsecured NCDs as these are backed up by assets. If you are moderate to high-risk investor and willing to consider all the risks indicated above, you can invest in these NCDs. Low risk investors should stay away from such NCD bonds.

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Suresh KP

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