IIFL NCD issue Jan 2019, should you buy or avoid?
India Infoline has launched NCD issue Jan 2019. Should retail investors buy? Bond issues targeting an assorted investors includng retail investor has been a common theme in the last year. After a series of debenture issues in 2018, now India Infoline finance has come up with an issue of Rs. 2000 crore this year.
About the Company – IIFL Holdings Limited – Incorporated in 1995, Listed on NSE and BSE in 2005. IIFL has pan-India presence as well as subsidiaries in major global financial centres. IIFL is three key group companies, India Infoline Finance, IIFL Wealth and IIFL Securities.
IIFL Wealth – Family office, AIFs, advisory and distribution services
IIFL Securities – Retail and institutional broking, investment banking
IIFL Wealth – Family office, AIFs, advisory and distribution services
IIFL Securities – Retail and institutional broking, investment banking
IIFL Finance deals with Home finance, LAP, Gold loan, Commercial Vehicle, SME and Micro Finance loans. India Infoline Finance Limited (IIFL Finance) was incorporated in 2004 under the flagship of IIFL Holdings Limited and presently offers small-ticket loan products to retail borrowers, delivered through a pan India branch network of 1,755# branches and digital channels. Now it has a two ddistinct subsidisry a micro finance company and a home fiancé company.
Object of the issue – For the purpose of onward lending, financing and for repayment/prepayment of interest and principal of existing borrowings – At least 75% of the Net Proceeds of the Issue. The money also will be used for General Corporate Purposes – up to 25% of the Net Proceeds of the Issue. An investor with a demat account can apply for the issue. Issue opens on 22nd Jan, and closes on 20th Feb, however, the allotment is on first cum first served basis. NCD unit priced at 1,000, on can apply for minimum 10 units. Issuer aims a raising funds of Rs 2000 cr
Nature of bonds – Secured and Unsecured NCDs
Credit Ratings “AA/Stable” by CRISIL and ICRA,”AA+/Stable” by Brickwork
The company offered both secured and unsecured debenture in this issue. The secured fixed income instrument offers a tenure of 36-60 months, with coupon rate varying from 9.5 – 10.2% interest. Category 1 – Corporates, category II – Non-institutional investors, III – HNIs, Category IV – Retail investors. Retail investors can subscribe upto 30% of the issue.
Mymoneystreets take – Indiainfoline is an established name in broking, NBFC, Mutual Fund and as investment firm, it is also and established distributor of financial products. The current issue of the company is offering atleast 2% higher return compare to bank fixed deposit. With AA rating, investors can look at invest in the secured debentures. Unsecured debentures carries higher risk and higher return. Investor can look at 30% of fixed income allocation in NCD portfolio to give it an edge and diversification.
