Nido Home Finance Limited (formerly known as Edelweiss Housing Finance Limited) is coming up with secured NCD bonds now. Company is a non-deposit-taking housing finance company offering customers access to credit for various types of loans. The interest rates for Nido Home Finance NCD are up to 11%. These NCDs are offered for 24 months to 120 month tenure. Interest is paid either monthly and yearly or on maturity depending on the NCD option. Should you invest in Nido Home Finance NCD’s of Sep-2024? What are the risk factors one should consider before investing in Nido Home Finance NCD 2024?
About Nido Home Finance Limited
Company is a non-deposit taking Housing Finance Company focused on offering secured loan products to suit the needs of individuals, including small ticket loans to its customers in the affordable housing category.
They are part of Edelweiss group which is one of the leading diversified financial services groups in India. Nido Home Finance Limited earlier known as Edelweiss Housing Finance Limited.
They offer customers a range of mortgage-related loan products, including:
Home Loans, which includes offering secured loans to salaried individuals, self-employed individuals, and others for purchase/ construction/ renovation of residential properties, against mortgage of the same property, comprises 56.97% of its Loan Book as at March 31, 2023, 63.95% of its Loan Book as at March 31, 2024 and 61.34% of its Loan Book as at June 30, 2024.
Non-Housing Loans including loan against property (LAP), is a loan facility majorly offered to self-employed individuals, against an unencumbered property, where the end use may be towards deployment of working capital, purchase of property or any other purpose. As a part of LAP, lease rental discounting is also offered where the lessee is a corporate entity.
Construction Finance, is a loan facility offered to real estate developers towards the cost of the construction of residential project. The financing is against a real estate collateral along with / without any other security. The loan disbursements are construction linked.
Nido Home Finance NCD – Sep-2024 – Issue Details
| Subscription opening Date | 18-Sep-24 |
| Subscription closure Date | 01-Oct-24 |
| Issuing Security Name | Nido Home Finance Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | Rs 50 Crores |
| Issue Size (Option to retain over subscription) | Rs 50 Crores |
| Total issue size | Rs 100 Crores |
| Issue price | Rs 1,000 per bond |
| Face value | Rs 1,000 per bond |
| Series | I to X |
| Minimum Lot size | 10 bonds and 1 bond there after |
| Tenure | 24, 36, 60 and 120 Months |
| Interest Payment frequency | Monthly or Yearly or on Maturity |
| Listing on | Within 6 working days on BSE |
| Lead Manager | Tipsons Consultancy Services Private Limited Nuvama Wealth Management Limited |
| Debenture Trustee/s | Beacon Trusteeship Limited |
Nido Home Finance NCD – Sep-2024 – Interest Rates
| Series | I | II | III | IV | V | VI | VII | VIII | IX | X |
|---|---|---|---|---|---|---|---|---|---|---|
| Frequency of Interest Payment | Annual | Cumulative | Monthly | Annual | Cumulative | Monthly | Annual | Cumulative | Monthly | Annual |
| Tenure (months) | 24 | 24 | 36 | 36 | 36 | 60 | 60 | 60 | 120 | 120 |
| Coupon (% per Annum) | 9.50% | NA | 9.58% | 10.00% | NA | 10.03% | 10.50% | NA | 10.49% | 11.00% |
| Effective Yield (% per Annum) | 9.50% | 9.50% | 10.01% | 10.00% | 10.00% | 10.58% | 10.49% | 10.50% | 11.00% | 10.99% |
| Amount on Maturity (In Rs.) | 1,000.00 | 1,191.13 | 1,000.00 | 1,000.00 | 1,331.18 | 1,000* | 1,000* | 1,648.27 | 1,000* | 1,000* |
* Redemption proceeds are as follows:
Nido Home Finance NCD – Sep-2024 – Credit Ratings
CRISIL Ratings assigned Nido Home Finance NCD rating as CRISIL A+/ Watch Negative. Securities with this rating are considered to have an adequate degree of safety regarding timely servicing of financial obligations. Such securities carry a low credit risk.
How is the company doing in terms of profits?
Its profits are as below:
- FY2021 – Rs 3.72 Crores
- FY2022 – Rs 13.8 Crores
- FY2023– Rs 16.06 Crores
- FY2024– Rs 19.3 Crores
Why to invest in Nido Home Finance NCD – Sep-2024?
- Nido Home Finance NCD’s offer attractive interest rates where investors can get interest up to 11% per annum.
- Company is generating consistent margins. Investors should always invest in growing and consistent margin generating companies.
- It issues secured NCDs. In case a 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 Nido Home Finance NCD – Sep-2024?
- Company is an HFC and therefore subject to various regulatory and legal Also, future regulatory changes may have a material adverse effect on its business.
- They require substantial capital for its business, and any disruption in the sources of capital could have an adverse effect on its business.
- Any negative events affecting the Indian real estate sector could adversely affect the value of the collateral for its loans, its business and result of operations.
- Any increase in the levels of non-performing assets, for any reason whatsoever, would adversely affect its business.
- They may face asset-liability mismatches, which could affect its liquidity and consequently affect its operations and financial performance adversely.
- Refer Nido Home Finance NCD Sep-24 prospectus for complete risk factors.
Should you invest in Nido Home Finance NCD – Sep-2024?
Current Nido Home Finance NCD issue offers high interest rates and yield. These days banks are offering high FD rates, however these NCDs still offer high interest rate up to 11% interest rates. Company is also earning consistent margins and these secured NCDs too.
On the other side, investors should not forget about the risks involved in investing in NBFC bonds. Earlier there were many NBFCs which were defaulters, and there were delays in repayments of capital and interest.
High risk investors who are willing to consider all these risks can invest in such NCDs.
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