InCred Financial Services NCD Offers 10% interest in Jan-2023 issue

InCred Financial Services has come up with secured NCD issue that would open for subscription on 9th January 2023. InCred Financial Services Limited (erstwhile known as KKR India Financial Services Limited) is systemically important non deposit taking NBFC company in India. InCred Financial Services offer interest rates are up to 10%. These bonds are issued in 4 different series and for a tenure of 27 and 39 months. Should you invest in InCred Financial Services NCD’s of January 2023 issue? What are the risk factors one should consider before investing in such high risk NCDs?

Also Read: Revised Post Office interest Rates Jan to Mar-23

About InCred Financial Services Limited

They are a non-deposit taking systemically important NBFC registered with the RBI. Company caters to lower middle class to middle class Indian households for their personal finance needs like education loans, personal loans.

Correspondingly, it also offers secured and unsecured business loans to small businesses, secured loan to K12 Indian schools for their expansion plans, supply chain financing, lending to profitable financial Institutions and micro finance companies and escrow backed lending through its SME vertical.

InCred Financial Services NCD Jan-23 - Check interest rates, credit rating, why to invest and why not to invest and final review

InCred Financial Services NCD – Jan-23 issue details

Opening Date 09-Jan-23
Closure date 27-Jan-23
Security Type Secured, Redeemable and Non-Convertible NCDs
Issue Size (Base) Rs 175 Crores
Issue Size (Shelf) Rs 350 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 27 and 39 months
Series Series I to IV
Interest Payment frequency Quarterly and Annual
Listing on Within 6 working days on BSE

NRI’s cannot apply to this NCD subscription.

JM Financial Limited is the lead manager for the issue.

InCred Financial Services NCD Jan-2023 Prospectus

What are the InCred Financial Services NCD interest rates?

Series Months Interest payment Coupon Interest Rate Effective Yield Maturity Value
I 27 Quarterly 9.45% 9.78% 1,000
II 27 Annual 9.80% 9.82% 1,000
III 39 Quarterly 9.65% 10.00% 1,000
IV 39 Annual 10.00% 10.02% 1,000

What are the InCred Financial Services NCD credit ratings?

These NCDs have been rated as CRISIL A+/Stable by CRISIL Ratings. It indicates that Instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk.

How is the company doing in terms of profits?

Its consolidated profits are as below:

Period ending Sep-2021 – 2.37 Crores

Period ending Sep-2022 – 46.75 Crores. If we exclude exceptional item of Rs 40.65 Crores, it is Rs 6.1 Crores

Why to invest in InCred Financial Services NCD?

1) These NCDs offer attractive interest rates up to 10% and yield up to 10.02% per annum. Currently banks or financial institutions are offering lower rates compared to these rates, hence these are attractive investment options.

2) These are secured bonds. Means in case the company gets into financial crisis and shut down for some reason, NCD investors would get preference in repayment of capital and interest.

3) These NCDs are offered in 4 different series. Investors have a choice to invest in a series that are best suitable to them.

Why not to invest in these bonds?

Here are the risk factors of investing in these bonds.

1) Company earns thin margins. Its margins were at 1% for the period ending Sep-21 and 1.5% for the period ending Sep-22 (if we exclude exceptional items). Such thin margins can vanish with any significant interest rate changes for NBFC companies.

2) Customers may default on their repayment obligations that could have an adverse impact on business.

3) Company is vulnerable to volatility in interest rates and may face interest rate mismatches between assets and liabilities in the future and may cause liquidity issues.

4) Any increase in the levels of NPA would adversely affect its business.

5) Its loan book is comprised of unsecured loans. Its inability to recover the amounts due from customers in connection with such loans in a timely manner could adversely affect the business.

6) Company is subject to certain legal proceedings and any adverse decision in such proceedings may have an adverse effect on its business.

7) Company has limited operating history.

8) Any downgrade in its credit ratings may increase interest rates for raising new debt, which could increase finance costs and adversely affect company business.

9) Refer NCD prospectus for complete risk factors.

How to buy InCred Financial Services NCD?

These are issued only in demat form. You can login to your demat and trading account and check NCD’s link and select the InCred Financial Services NCD issue and enter the investment amount and submit.

Also Read: 5 Mutual Funds with highest SIP returns in last 10 years

Is InCred Financial NCD Safe to invest?

InCred Financial NCD offers high interest rates up to 10%. Currently banks or financial institutions are offering lower rates compared to such rates, hence these would definitely attract investors. These are secured NCDs. Means if the company gets into financial crisis or shut down for some reason, investors will get preference in the payment of interest and repayment of capital. These NCDs are rated as A+/Stable by CRISIL Ratings which are considered as good rating.

On the other hand, the company is earning thin margins of 1% to 1.5%. Any significant interest rate changes can ruin such margins. One should not forget about NBFC companies delaying payment of interest and repayment of capital. There are few cases of defaults too. Investors should consider these risk pointers before investing in such NCDs.

It looks high risk considering the past financial performance and other risk factors indicated above and I would advise investors to give a miss to such NCDs as of now.

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Suresh KP


  1. It is really becoming difficult to make any sound and realistic assessment of such issues because this company is having a rating of A+Stable but having such a thin margin of 1% to 1.5%. And any slight increase in NPA would toss their profitability.
    Sir, these NCDs are non-convertible, whereas, you are writing that these NCDs are “Secured, Redeemable and Converted NCDs”. What is the meaning of “converted” here.

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