Are you looking to diversify your portfolio and potentially earn a steady attractive fixed income? Then keep your eyes peeled because two exciting Non-Convertible Debentures (NCDs) have just launched! To know more read on.
In this post, we’ll briefly introduce these upcoming NCDs to pique your interest. But remember, this isn’t financial advice – do your own research before making any investment decisions.
NCD #1: Muthoot Fincorp Limited NCD Tranch IV (April 2024)
About Muthoot Fincorp
The flagship company of the Muthoot Pappachan Group, Muthoot Fincorp has over 136+ years of legacy from its parent company. Muthoot Fincorp is a leading NBFC in India with over 3600 branches all over India. Their customer base is more than 20 Lakh, they have disbursed more than Rs. 40,000 Crores of loans in previous financial year.
They are known for their gold loans, but also offer a wide range of financial products and services, including:
- MSME loans
- Affordable Housing Loans
- Two-wheeler & Used Car loans
- Money Transfer
- Microfinance
- Wealth Management Services
- Foreign exchange (authorized dealer category)
- Insurance services (through group companies)
Details of Muthoot Fincorp Tranch IV NCD
This Public NCD issue has base issue size of ₹ 10,000 lakh with an option to retain over- subscription up to ₹ 26,000 lakh aggregating up to ₹ 36,000 lakh.
| Title | Details |
| Issue opens | Tuesday, April 10, 2024 |
| Issue closes | Monday, April 25, 2024 |
| Allotment | First Come First Serve Basis |
| Face Value | Rs.1,000 per NCD |
| Issue Price | Rs.1,000 per NCD |
| Nature of Instrument | Secured Redeemable Non-Convertible Debentures |
| Minimum Application | 10 NCDs (Rs.10, 000) & in multiple of 1 NCD thereafter |
| Tenure | 26, 38, 60, 72, and 94 Months |
| Interest Payment frequency | Monthly, Annually, and Cummulative |
| Listing | BSE |
| Lead Manager To The Issue | SMC Capitals Limited |
| Deemed date of Allotment | 30th April 2024 |
| Rating | CRISIL AA-/Stable |
Attractive Interest Rates (Effective Yield)
For the 72-month term (6 years), they are offering an effective yield of 10% for both the annual and cumulative interest options. However, if you choose the monthly interest payout option for the same term, your effective yield will be slightly lower at 9.97%.
Double your investment by parking it for a tenure of 94 months (8 years).
See the tables below for effective yields for other terms:
Monthly Interest Payment Frequency
| Tenure | 26 | 38 | 60 | 72 |
| Coupon | 8.90% | 9.15% | 9.35% | 9.55% |
| Effective Yield | 9.26% | 9.54% | 9.75% | 9.97% |
Yearly Interest Payment Frequency
| Tenure | 26 | 38 | 60 | 72 |
| Coupon | 9.25% | 9.50% | 9.75% | 10.00% |
| Effective Yield | 9.27% | 9.52% | 9.74% | 10.00% |
Cummulative Payment
| Tenure | 26 | 38 | 60 | 72 |
| Effective Yield | 9.27% | 9.52% | 9.74% | 10.00% |
NCD #2: Edelweiss Financial Services Limited NCD (April 2024)
Edelweiss Financial Services Limited (“EFSL”), was incorporated on November 21, 1995 under the name Edelweiss Capital Limited and started operations as an investment banking firm after receipt of a Category II license from SEBI. Edelweiss Capital Limited subsequently received a Category I Merchant Banker license from SEBI with effect from October 16, 2000. The name of Edelweiss Capital Limited was changed to ‘Edelweiss Financial Services Limited’ with effect from August 1, 2011.
Key lines of business of Edelweiss are
- Retail Credit (Home Loans, SME and Business Loans)
- Asset Management (Mutual Funds and Alternative Assets)
- Asset Reconstruction
- Insurance (Life, General)
Details of Edelweiss NCD
This public NCD issue has a base size of ₹ 1,000 million with the option to retain oversubscription of up to ₹ 1,000 million, for a total issue size of up to ₹ 2,000 million. Forty percent (40%) of the offering is reserved for retail individual investors, while another 40% is reserved for High Net Worth Individuals (HNIs). Investors investing less than ₹ 10 lakh are classified as retail investors.
| Title | Details |
| Issue opens | Tuesday, April 08, 2024 |
| Issue closes | Monday, April 23, 2024 |
| Allotment | First Come First Serve Basis |
| Face Value | Rs.1,000 per NCD |
| Issue Price | Rs.1,000 per NCD |
| Nature of Instrument | Secured Redeemable Non-Convertible Debentures |
| Minimum Application | 10 NCDs (Rs.10, 000) & in multiple of 1 NCD thereafter |
| Tenure | 24, 34, and 120 Months |
| Interest Payment frequency | Monthly, Annually, and Cummulative |
| Listing | BSE |
| Lead Manager To The Issue | Nuvama Wealth Management Limited and Trust Investment Advisors Private Limited |
| Deemed date of Allotment | |
| Rating | CRISIL A+/Stable |
Attractive Interest Rates (Effective Yield)
For those considering a 60-month (5-year) investment, you have the option to receive your principal back in stages starting from the third year. You will receive 25% of your initial investment on each anniversary of your investment in the third and fourth years. The remaining 50% will be returned at the end of the fifth year.
A similar option is available for a 120-month (10-year) investment. In this case, you will begin receiving 20% of your principal annually starting in the sixth year.
These staggered return options can be beneficial for investors who are comfortable with longer investment terms but may need access to some of their capital before the investment matures.
Monthly Interest Payment Frequency
| Tenure | 36 | 60 | 120 |
| Coupon | 9.20% | 9.67% | 10.00% |
| Effective Yield | 9.60% | 10.10% | 10.46% |
Yearly Interest Payment Frequency
| Tenure | 24 | 36 | 60 | 120 |
| Coupon | 9.00% | 9.60% | 10.10% | 10.45% |
| Effective Yield | 9.00% | 9.60% | 10.09% | 10.44% |
Cummulative Payment
| Tenure | 24 | 36 | 60 |
| Effective Yield | 9.00% | 9.60% | 10.10% |
Stay tuned
So, stay tuned! And in the meantime, if you have any questions about NCDs or these specific offerings, feel free to connect with us .
