Vivriti Capital is coming up with Secured NCD issue that opens for subscription on August 18, 2023. Vivriti Capital is non-deposit taking systemically important non-banking financial company (NBFC) company in India. It offers 18 and 24 months tenure NCDs. Should you invest in Vivriti Capital NCD of August, 2023 issue? What are the risk factors one should consider before investing in Vivriti Capital NCD 2023?
Also Read: How to create 1 Crore with 5K SIP per month in mutual funds?
About Vivriti Capital Limited
Company is registered with the RBI as a non-deposit taking systemically important non-banking financial company.
They offer lending products to mid-corporates. Such products include term loans, working capital demand loans, co-lending with financial partners, securitisation of receivables, direct assignment of receivables, supply chain finance and subscription tobonds and commercial paper.
They cover a diversified demographic of clients through its lending products and provide access to financial services by leveraging technology and offering customized financial solutions to its clients.
Company says their target clients comprise entities which are either unrated or have ratings that do not permit its clients to have easy access to banking finance, and primarily hailing from urban/ semi-urban areas.
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Vivriti Capital NCD – August-23 issue details
| Subscription opening Date | 18-Aug-23 |
| Subscription closure Date | 31-Aug-23 |
| Issuing Security Name | Vivriti Capital Limited |
| Security Type | Secured, Redeemable and Non-Convertible NCDs |
| Issue Size (Base) | ₹ 250 Crores |
| Issue Size (Option to retain over subscriptoin) | ₹ 250 Crores |
| Total issue size | ₹ 500 Crores |
| Issue price | ₹ 1,000 per bond |
| Face value | ₹ 1,000 per bond |
| Series | I to V |
| Minimum Lot size | 10 bonds and 1 bond there after |
| Tenure | 18 to 24 months period |
| Interest Payment frequency | Monthly , Annual and on maturity |
| Listing on | Within 6 working days on BSE |
| Debenture Trustee/s | Catalyst Trusteeship Limited |
Vivriti Capital NCD Interest Rates – August-23 Issue
| Series | I | II | III | IV | V |
|---|---|---|---|---|---|
| Frequency of Interest Payment | Monthly | Annual | Quarterly | Monthly | Annual |
| Tenure (in months) | 18 | 18 | 24 | 24 | 24 |
| Coupon (% per Annum) | 9.57% | 10.00% | 9.65% | 10.03% | 10.50% |
| Effective Yield (% per Annum) | 9.98% | 10.06% | 9.98% | 10.49% | 10.48% |
| Amount on Maturity (In ₹.) | 1,000 | 1,000.00 | * See Note | 1,000.00 | 1,000 |
*Staggered Redemption in eight (8) quarterly payments of ₹ 125 each, starting from 1st quarter until maturity
What are the credit ratings for these NCDs?
Vivriti Capital NCD’s are rated as ICRA A (Stable) by ICRA Limited and CARE A+ by CARE Ratings Limited. Instruments with this rating are considered to have 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?
Its standalone profits are as below:
- FY2021 – ₹ 30 Crores
- FY2022 – ₹ 67.36 Crores
- FY2023 – ₹ 129.29 Crores
Why to invest in these Vivriti Capital NCD?
- These NCD’s offer good interest rates up to 10.5% per annum.
- Vivriti Capital margins are improving year on year. This would help NCD investors to reduce the default risks in future.
- These are secured NCDs. I always ask investors to invest in secured NCDs as in case the company gets wind-up / shut down for some reason, investors would still get preference in repayment of capital.
Why not to invest in these NCDs?
- Capital repayment under Series III option of the NCD provides staggerred payments in 8 installments. Means you invest lumpsum, but your capital would be repaid ₹ 125 per quarter each for 8 quarters. Unless you are fine with such split, you should avoid such option.
- Company require substantial capital for its business and any disruption in sources of capital could have an adverse effect on its business, results of operations and financial condition
- They are affected by volatility in interest rates and other market conditions, which could materially and adversely impact its business, prospects, financial condition, results of operations and cash flows.
- If its customers materially default in their repayment obligations, its business, results of operations, financial condition and cash flows may be adversely affected.
- They have experienced significant growth in recent periods, and they may not be able to sustain its growth or manage it effectively.
- They utilise the services of certain third parties for its business operations. Any deficiency or interruption in the third parties’ services could adversely affect its business and reputation.
- A portion of its loans are unsecured. If borrowers under unsecured loans default and they are unable to recover such receivables in a timely manner or at all, its financial condition, results of operations and cash flows may be adversely affected.
- Refer NCD prospectus for complete risk factors.
Also Read: How these 10 funds turned 10K SIP to up to ₹ 52 Lakhs in 10 years?
Should you invest in Vivriti Capital NCD of August-23 issue?
Vivriti Capital NCD issue offers high interest rates. These NCDs are rated as A+ / A (Stable) by CARE Ratings and ICRA. It offers short term tenure NCDs which are good for investment. These are secured NCDs too.
On the other side, there are company specific risk factors such as business effecting due to volatality in interest rates and unsecured loans offered by the company etc., Beyond this, there are risks involved in investing in NBFC company which I keep re-iterating in all these reviews.
Investors who understand all these pros and cons can invest in these NCDs.
Source RHP: Vivriti Capital August-22 NCD issue RHP
FAQs on Vivriti Capital NCD
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