KLM Axiva Finvest is coming up with secured NCD Issue that would open for subscription on 20th February, 2023. KLM Axiva Finvest is a non deposit taking systemically important NBFC in India. KLM Axiva Finvest NCD interest rates are up to 10.75% and yield works out up to 11.02%. Your money would get doubled in 82 months. Should you invest in KLM Axiva Finvest NCD 2023? What are the risk factors one should consider before investing KLM Axiva NCD 2023 issue?
Also Read: Indore Municipal Green Bonds Offers 8.25% Interest Rates
About KLM Axiva Finvest Limited
They are a non-deposit taking and non – systemically important non-banking finance company primarily serving low and middle income individuals and businesses that have limited or no access to formal banking and finance channels. They operate primarily in four business verticals:
(i) Gold loan business, lending money against the pledge of household jewelry
(ii) Micro, small and medium enterprise loan
(iii) Personal loan and
(iv) Microfinance loan to women customers.
KLM Axiva Finvest NCD – Issue Details
| Opening Date | 20-Feb-23 |
| Closure date | 03-Mar-23 |
| Security Type | Secured, Redeemable and Non-Convertible NCDs |
| Issue Size (Base) | Rs 125 Crores |
| Issue Size (Oversubscription) | Rs 125 Crores |
| Total Issue Size | Rs 250 Crores |
| Issue price | Rs 1,000 per bond |
| Face value | Rs 1,000 per bond |
| Minimum Lot size | 5 bonds and 1 bond there after |
| Tenure | 480 days to 82 months |
| Interest Payment frequency | Monthly yearly and on maturity |
| Listing on | Within 6 working days on BSE/NSE |
NRI’s cannot apply to this NCD subscription.
KLM Axiva Finvest NCD Feb-23 Prospectus
KLM Axiva Finvest NCD Interest Rates
| Details | Series 1 | Series 2 | Series 3 | Series 4 | Series 5 | Series 6 | Series 7 | Series 8 | Series 9 | Series 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Frequency of Interest Payment | Monthly | Cumulative | Monthly | Monthly | Annual | Monthly | Annual | Monthly | Annual | Cumulative |
| Tenor (in months) | 400 Days | 16 | 18 | 24 | 24 | 36 | 36 | 60 | 60 | 82 |
| Coupon (% per Annum) | 8.75% | NA | 9.10% | 9.25% | 9.50% | 9.50% | 9.75% | 10.50% | 10.75% | NA |
| Effective Yield (% per Annum) | 9.11% | 9.45% | 9.49% | 9.65% | 9.50% | 9.92% | 9.75% | 11.02% | 10.75% | 10.68% |
| Amount on Maturity (In Rs.) | 1,000 | 1,128 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 2,000 |
KLM Axiva Finvest NCD 2023 Ratings
The secured NCDs have been rated by India Ratings and Research as Ind BBB-/Stable.
The rating of NCDs indicates that instruments with this rating are considered to have a moderate risk of default regarding timely servicing of financial obligations.
KLM Axiva Finvest NCD – Are these secured NCD bonds?
These bonds are secured.
The principal amount of the NCDs with all interest due on the NCDs shall be secured by way of first ranking pari passu charge with existing secured creditors, on all movable assets, including book debts and receivables, cash and bank balances, other movable assets. Loans and advances, both present and future of the company.
How is the company doing in terms of profits?
Its standalone profits are as below:
Year ended Mar-2020 – Rs 50.6 Lakhs
Year ended Mar-2021 – Rs 705.8 Lakhs
Year ended Mar-2022 – Rs 1,138.3 Lakhs
6 months ended Sep-2022 – Rs 1,112.6 Lakhs
KLM Axiva Finvest NCD 2023 – Why to invest?
1) These NCDs offer attractive interest rates up to 10.75% and yield up to 11.02%.
2) The company is earning consistent and improving margins in the last few years. One should always invest in consisting growing companies with strong financials where the repayment to NCD investors is done on time without delay.
3) It issues Secured NCDs. In case of any under performance of the company and the company gets shut down for some reason, NCD investors would get preference in repayment of capital along with interest. Hence, it is safe to invest in such secured NCD options. However, it is only preference is given to NCD investors and no guarantee that entire amount would be paid-back in such cases.
KLM Axiva Finvest NCD 2023 – Why not to invest?
1) Company, its Promoter and Directors and its Group companies have been subject to search and seizure operations conducted by the Indian income tax authorities.
2) Its financial performance is particularly vulnerable to interest rate volatility. If they are unable to manage interest rate risk in the future it could have an adverse effect on its net interest margin, thereby adversely affecting the business and financial condition of the company.
3) Its business requires substantial capital, and any disruption in funding sources would have a material adverse effect on its liquidity and financial condition.
4) High levels of customer defaults or delays in repayment of loans could adversely affect its business, financial condition and results of operations.
5) Other, Internal and external factors can be read at the risk factors section of the NCD prospectus.
How to apply KLM Axiva NCD Sep 2023 issue?
KLM Axiva Finvest NCD Issue of February 2023 is available in only in demat form. You can apply online or through any of the broker website where you are maintaining a demat account. Full form can be downloaded on the lead manager website. For more information on this, you can refer prospectus.
Is KLM Axiva NCD safe?
KLM Axiva NCDs are rated by Ind Ratings as BBB-/Stable. NCD bonds with such ratings are considered as high risk.
Also Read: 4 Mutual Funds doubling every 5 years
KLM Axiva NCD Review – Should you invest?
KLM Axiva Finvest is offering secured NCDs that offers high interest rates up to 10.75% and yield up to 11.02%. While banks have increased the interest rates in the recent times, these are around 7% to 7.5%, KLM Axiva, hence investors would get tempted to invest in these NCD bonds.
These bonds carry a low credit rating of BBB- Stable by Ind Ratings which is high risk. Your capital could be at risk if the such NBFC company gets into financial crisis. Don’t forget about the DHFL crisis and delays from many NBFC companies in repayment of the principal capital to NCD investors.
Considering low credit rating, investors can avoid such NCD bonds as of now. They can invest in A / AA / AAA rated bonds, which keep coming to market now and then.
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Thank you. Good review.
Hi Suresh,
Please suggest one consistent performing mutual fund for long term if a portfolio contains 1 small cap and 1 midcap fund for aggressive investor to make a balanced portfolio.
You can check any of the following funds
1) Midcap – Kotak Emerging equity fund or Motilal Oswal Midcap Fund or Quant midcap fund
2) Smallcap – Nippon Smallcap Fund or Quant Smallcap fund
Thanks Suresh,
Which other fund you would suggest from large and mid cap or flexicap or multicap or focused or value fund.
This artilce should help you from largecap fund perspective. https://myinvestmentideas.com/top-best-large-cap-mutual-funds-to-invest-in-2023/
Hi Suresh,
Thank you
Please suggest any other fund apart from the Midcap and small cap category. The funds need to be consistent and highly growth oriented for long term goal.