InvestorQ : Could you give us some details about IIFL’s latest NCD issue?
Suresh Patil made post

Could you give us some details about IIFL’s latest NCD issue?

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Manisha Mehta answered.
1 month ago
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IIFL Finance has launched a non-convertible debenture (NCD) issue of up to Rs1,000cr offering an effective yield of up to 10.03%. The issue is part of the company’s fundraising plan, under which it aims to raise up to Rs5,000cr. The latest issue of unsecured NCDs has a base size of Rs100cr with a greenshoe option to retain an oversubscription of up to Rs900cr. The bonds offer up to 10.03% yield for a tenor of 87 months and the issue has been rated AA with a negative outlook by Crisil Ltd and AA+ with a negative outlook by Brickwork Ratings.

How frequent are the interest payments?

There are three options of interest payment frequency you can choose from—annual, monthly, and at maturity. In the monthly option, investors can earn 9.6% while in the annual option, the yield is 10%. Those opting for cumulative interest will earn a 10.03% return. This return is up to 5.5% higher than the interest rate offered by leading banks on their fixed deposits.

Who can apply for the NCD?

The NCD is open to all categories of investors. As far as IIFL is concerned, the NCD will be allocated to the four categories of investors as under-

Category 1 – Institutional Portion has a 10% allocation of the overall issue size. These investors include SEBI registered QIBs, mutual funds, provident funds, VCs, AIFs, insurance companies, SIDCs, and systemically important NBFCs.

Category 2 – Corporate Portion also has a 10% allocation of the overall issue size. These investors include listed and unlisted companies, statutory corporations, trusts, partnership firms, LLPs, AOPs, and scientific organizations.

Category 3 – HNI Portion has a 40% allocation of the overall issue size. These include high net worth investors and Kartas of HUFs, investing more than Rs10,00,000 in all options of the NCD put together.

Category 4 – Retail individual portion also has a 40% allocation of the overall issue size. These include retail individual investors and the Karta of HUFs investing up to Rs 10,00,000 across all the tranche options or Rs2,00,000 in a single option.

Should you apply for IIFL’s NCD?

Yes, investors shouldn’t miss the opportunity to apply for IIFL’s NCD issue. The company is on solid ground as far as fundamentals are concerned. It offers a double-digit coupon rate,  which is higher than a lot of alternate investment options, which offers scope for capital appreciation.
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