Navi Finserv NCD issue of May 2022 – Issue Details, Interest Rates and Review
Navi Finserv is coming up with secured NCD bonds now. These bonds would open for subscription on 23rd May, 2022. Navi Finserv is the Company is a non-deposit taking, systemically important NBFC registered with RBI. The interest rates for Navi Finserv NCD are up to 9.75% and yield works up to 9.77%. These NCDs are offered for 18 months and 27 months tenure. Interest is paid either monthly or yearly. Should you invest in Navi Finserv NCD issue of May, 2022? What are the risk factors one should consider before investing in Navi Finserv upcoming NCD 2022?
About Navi Finserv Limited
Company is a non-deposit taking, systemically important NBFC registered with RBI and wholly owned subsidiary of NTL.
NTL is a technology driven financial products and services company in India focussing on digitally connected young middle-class population in India.
Company offer lending products like personal loans, home loans under the Navi brand.
It also offer microfinance loans under the brand name “chaitanya” through its subsidiary, CIFCPL
Navi Finserv NCD issue – May-2022
Navi Finserv NCD opens on Monday, 23rd May, 2022 and closes on Friday, 10th June, 2022.
NCD’s are available in 4 different options. The tenures for these NCDs are for 18 months and 27 months.
Coupon interest rates for all categories of investors are between 9.2% to 9.75%. Yield on these NCD bonds works out up to 9.77%.
These are secured NCDs.
Interest is payable monthly or annual basis depending on the option chosen by the NCD investor.
Navi Finserv NCD Price per bond is Rs 1,000.
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 bonds would be listed on BSE within 6 working days from the issue closure date.
These are allotted on first come first serve basis. Hence the issue can be closed before this date if it is oversubscribed before the closure date.
NRI’s cannot apply to this NCD subscription.
Navi Finserv NCD base issue size is Rs 300 Crores with an option to retain for another Rs 300 Crores totalling to Rs 600 Crores.
AK Capital Services and JM Financials are the lead manager for the issue.
Navi Finserv NCD Interest Rates – May-2022 Issue
What are the credit ratings for these NCDs?
IND Ratings and Research assigned Navi Finserv NCD rating as IND A/ (Stable). Instruments with this rating are considered to have a 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?
Here are the standalone profits of the company.
FY2020 – Rs 9.7 Crores
FY2021 – Rs 97.5 Crores
9 months ending Dec-21 – Loss of Rs 62.5 Crores
Why to invest in these NCDs?
1) Navi Finserv NCD’s offer attractive interest rates where investors can get interest up to 9.75% and yield up to 9.77% per annum.
2) It issues secured NCDs. Its 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.
Why not to invest in these NCDs?
1) Company has incurred losses for 9 months ending Dec-21. Investors should always invest in profit making companies so that they can get timely payment of interest and repayment of capital.
2) Company rely intensively on substantial capital for its lending and microfinance business operations. Any disruption can affect company financial condition and liquidity
3) Company is affected by volatility in interest rates in both lending and treasury operations which could cause its net interest income to varry and affect its profitability.
4) Company has significant growth in recent period and may not be able to grow at similar pace in future or manage it effectively.
5) Customers default in repayment obligations can adversely affect company.
6) Covid pandemic has affeced its regular business operations and may continue in fuure too.
7) Refer NCD prospectus for complete risk factors.
How to invest in Navi Finserv NCD Online?
This issue 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. Application forms can be downloaded on the lead manager web site. For more information on this you can refer prospectus.
How safe is Navi Finserv NCD?
These NCD bonds are rated as A/ (Stable) by Ind Ratings and Research. Such ratings are considered to have adequate safety regarding timely servicing of financial obligations with low risk.
Should you invest in Navi Finserv NCD?
Navi Finserv NCD of May-2022 issue offers high interest rates and yield. It comes with A/Stable credit ratings which are considered to have adequate safety and carry low risk. However, such credit ratings can change in future without any advance intimation or notice. Company has turned to be loss making for 9 months ended Dec-21. While these are secured NCDs these bond, there is some risk element. Investors who understand these risk factors can invest in these NCD bonds, else stay away.
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