Indostar Capital Finance NCD Sep-2024 – Introduction
Indostar Capital Finance Limited has come up with secured NCD bonds which have opened for subscription now. Indostar Capital Finance Limited is a non-banking finance company (NBFC) registered with the Reserve Bank of India as NBFC-ML. The NCD interest rates for Indostar Capital Finance NCD are up to 10.7%. These NCDs have a tenure of 24 months to 60 months, and interest is paid either quarterly, yearly and cumulative. Should you invest in Indostar Capital Finance NCD Sep-2024 issue? What are the risk factors one should consider before investing in such high-risk NCDs? In this article we would do Indostar Capital Finance NCD Sep-2024 Review.
About Indostar Capital Finance Limited
Company is a non-banking finance company (NBFC) registered with the Reserve Bank of India as an NBFC-ML.
They are a professionally managed and institutionally owned company which is primarily engaged in providing secured financing solutions to borrowers across categories: used and new vehicle financing for transporters, affordable home finance solutions to home loan borrowers, loans to SME borrowers and structured term financing solutions to corporates.
Indostar Capital Finance NCD Sep-2024 details
Here are the NCD issue details.
| Subscription opening Date | 06-Sep-14 |
| Subscription closure Date | 19-Sep-24 |
| Issuing Security Name | Indostar Capital Finance Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | Rs 150 Crores |
| Issue Size (Option to retain over subscription) | Rs 150 Crores |
| Total issue size | Rs 300 Crores |
| Issue price | Rs 1,000 per bond |
| Face value | Rs 1,000 per bond |
| Series | Series I to V |
| Minimum Lot size | 10 bonds and 1 bond there after |
| Tenure | 24, 36, and 60 Months |
| Interest Payment frequency | Quarterly, Annual and Cumulative |
| Listing on | Within 6 working days on BSE |
| Lead Manager | Nuvama Wealth Management Limited |
| Debenture Trustee/s | IDBI Trusteeship Services Ltd. |
Indostar Capital Finance NCD Sep-2024 Coupon Interest rates
As per the Indostar Capital Finance NCD Sep-2024 prospectus, here are the interest rates.
| Series | I | II | III | IV | V |
|---|---|---|---|---|---|
| Frequency of Interest Payment | Annual | Cumulative | Quarterly | Annual | Annual |
| Tenure (Months) | 24 | 24 | 36 | 36 | 60 |
| Coupon (% per Annum) | 10.50% | NA | 10.30% | 10.70% | 10.50% |
| Effective Yield (% per Annum) | 10.50% | 10.50% | 10.70% | 10.70% | 10.49% |
| Amount on Maturity (In Rs.) | 1,000.00 | 1,221.31 | 1,000.00 | 1,000.00 | 1,000.00 |
Company Credit Ratings
These NCDs have been rated AA-/ Stable by CARE Ratings. Instruments with this rating are considered to have the highest degree of safety in terms of timely servicing of financial obligations, carrying very low credit risk.
Objects of the Issue
The company intends to use the net proceeds from the NCD issue towards the funding of the following objectives:
- Onward lending
- General Corporate Purpose
How is the company doing in terms of revenues and profits?
Here are the details of the consolidated financials of the company.
| Period Ended | 31-Mar-22 | 31-Mar-23 | 31-Mar-24 |
|---|---|---|---|
| Assets | 9,661.5 | 9,122.2 | 11,120.7 |
| Revenue | 1,174.3 | 1,179.7 | 1,397.5 |
| Profit After Tax | -736.5 | 225.2 | 115.8 |
Company Contact Information
Indostar Capital Finance Limited. Off No -301, Wing A, CTS No 477,
Silver Utopia, Chakala Road, Opp Proctor, Opp Proctor and Gamble, Andheri(E), Mumbai – 400 099 Phone: +91 22 4315 7000
Email: investor.relations@indostarcapital.com
Website: https://www.indostarcapital.com/
Reasons to Invest in Indostar Capital Finance NCD Sep-2024
- Indostar Capital Finance NCD bonds offer attractive interest rates, allowing investors to earn up to 10.7% per annum.
- The company issues secured NCDs, which are safer compared to unsecured NCDs. In the event of the company winding up or shutting down for any reason, secured NCD investors would receive preference in the repayment of capital along with interest, as these NCDs are backed by the company’s assets. Therefore, investing in such secured NCD options is considered safe.
- The company holds a good credit rating of AA-/Stable from CARE Ratings.
- It provides 5 flexible investment options, allowing investors to choose the one that best suits their preferences.
Risk Factors in Indostar Capital Finance NCD Sep-2024
- During FY23 to FY24, though company revenues have increased by 18%, its margins have fallen by 49%. Even in FY22, company has incurred losses and there can be no assurance that company will not incur losses in the future.
- Company is affected by volatility in interest rates for both its lending and treasury operations, which could cause its net interest income to vary and consequently affect its profitability.
- They have expanded into new lines of business, and if they are unable to successfully run the new businesses profitably, its results of operations and financial condition may be affected
- Its Prior Statutory Auditors have provided qualified opinions/ adverse opinions and have highlighted certain emphasis of matters in their audit reports relating to its audited financial statements for the Fiscals 2023 and 2022.
- Company, Directors, Promoter and its subsidiary are subject to certain legal proceedings and any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.
- Company has in the past failed to comply with the minimum public shareholding requirements prescribed under the SCRR.
- Please refer to the NCD prospectus for a comprehensive list of risk factors.
Indostar Capital Finance NCD Sep-2024 – Should you invest or avoid?
Indostar Capital NCD’s offer good interest rates up to 10.7%. These NCDs are rated as AA-Stable by CARE Ratings which are considered as good ratings.
One should note that credit ratings are subject to change at any time. Company has incurred losses in the past and its margins have declined in CY24 compared to previous year.
Investors can invest in such NCDs if they are willing to consider all these risk factors.
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It is a Brookefield group company holding 56% equity in Indostar Capital, India. Should this information change our views on this versus Sammaan Capital NCD issue.
I don’t think any material impact would be there based on this.
Between Indostar and Sammaan Capital, which one is better, since both are having same credit ratings, so the decision is tough.
Both have their pros and cons. However Indostar capital finance has turned loss making to profit making in CY23, hence there is no guarantee that company would not incurr losses in future. Among both, Saammaan Capital scores slightly higher.
Thank you, Sir.