9.05% Indiabulls Housing Finance NCD Sep-22 – Quick Review

Indiabulls Housing Finance Limited is coming up with NCD issue which would open for subscription on 5th September 2022. In this Tranche-II NCD issue, it is coming up with secured NCD bonds now. Indiabulls Housing Finance Limited is one of the leading housing finance companies (HFCs) in India in terms of AUM. The NCD interest rates for Indiabulls Housing Finance NCD are up to 9.05% and yield is up to 9.54%. These NCDs have tenure of 24 months to 60 months. These interests are paid either monthly or yearly or on maturity. Should you invest in Indiabulls Housing Finance NCD’s of September 2022 issue? What are the risk factors one should consider before investing in such high risk NCDs?

Also Read: 10 Best Govt Saving Schemes to invest in 2022

About Indiabulls Housing Finance Limited

Company is one of the largest housing finance companies (HFCs) in India in terms of AUM. They are a non-deposit taking HFC registered with the NHB.

Company primarily focuses on long-term secured mortgage-backed loans. Majority of its loan book comprises of secured loans. They primarily offer housing loans and loans against property to its target client base of salaried and self-employed individuals and micro, small and medium-sized enterprises. They also offer mortgage loans to real estate developers in India in the form of lease rental discounting for commercial premises and construction finance for the construction of residential premises.

Indiabulls Housing Finance NCD - Sep-22 issue details and review

Indiabulls Housing Finance NCD – Issue details

NCD subscription opens on 5th September 2022 (Monday) and closes on 22nd September 2022 (Thursday).

NCD’s are available in 8 different options. It offers NCDs for 24 months, 36 months and 60 months tenure.

Coupon interest rates for Category III and IV investors (including Retail investors) are between 8.64% to 9.05%.  Yield on these NCD bonds works out up to 9.54% which is highest.

These are secured NCDs.

Interest is payable monthly or yearly or on maturity depending on the option chosen by the NCD investor.

The face value of the NCD bond is Rs 1000.

Investors need to do minimum investment of 10 bonds / Rs 10,000. Beyond this one can invest in multiples of 1 bond.

These NCD bonds would be listed on NSE and BSE within 6 working days from the issue closure date. Hence these are somewhat liquid investments.

These are allotted on first come first serve basis. The issue can be closed earlier if it is oversubscribed before the closure date.

NRI’s cannot apply to this NCD subscription.

The base issue size of Sep-22 NCD issue is Rs 100 Crores with an option to retain over subscription up to Rs 900 Crores totaling to Rs 1,000 Crores.

Edelweiss Financial Services, AK Capital Services, IIFL Securities and Trust Investment Advisors are the lead managers for the issue.

Indiabulls Housing Finance NCD  – Interest rates

Here are the Indiabulls Housing Finance interest rates for Category III and IV investors (including retail investors).

Indiabulls Housing Finance NCD - Interest Rates for Sep-22 issue

Indiabulls Housing Finance NCD – Credit Ratings

These NCDs have been rated as CRISIL AA / Stable by CRISIL Ratings and ICRA AA Stable by ICRA. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.

How is the company doing in terms of profits?

Here are the details of profits of the company.

Year ending Mar-2020 – Rs 2,165 Crores

Year ending Mar-2021 – Rs 1,201 Crores

Year ending Mar-2022 – Rs 1,177 Crores

Indiabulls Housing Finance NCD – Why to invest?

1) Indiabulls Housing Finance bonds offer attractive interest rates where investors can get interest up to 9.05% per annum.

2) It issues secured NCDs. Secured NCDs are safe compared to unsecured NCDs. In case 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. Hence it is safe to invest in such secured NCD options.

3) Company has good credit rating of AA from CRISIL Ratings and ICRA.

Indiabulls Housing Finance NCD – Why not to invest?

1) Company profits are on declining mode.

2) Recent outbreaks of the covid-19 and lockdowns have impact on company business. Any such outbreaks in future cannot be predicted and can have impact in the operations of the company.

3) Increase in NPAs can affect the business.

4) Refer prospectus for complete risk factors.

How to subscribe to these NCDs?

This issue is available in only in demat form. You can login to your demat account, check for NCD section and look for these NCD links and apply for the same. For more information on this you can refer prospectus.

Also Read: Is it safe to invest in Bajaj Finance Fixed Deposits?

Indiabulls Housing Finance NCD – Should you invest or avoid?

Currently banks and NBFC companies are offering low interest rates, hence Indiabulls Housing Finance NCD interest rates would be tempting. Indiabulls Housing NCD rating is AA by CRISIL and ICRA which are considered as good rating. However, such credit ratings can further fall in future. High risk investors can invest in these secured NCDs.

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Suresh KP

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