ECL Finance NCD Issue November 2019, Features, Credit Rating, Reasons to Invest, why not to invest? & How to apply?
You are welcome in our post about “ECL Finance NCD Issue 2019.”
What is ECL?
Edelweiss (ECL) Finance is a leading nonbanking financing company that proffers corporate loan products, retail loan products which are customized to the need of the corporate.
ECL Finance NCD 2019 Tranche-I Public Issue would open for subscription on Nov 04, 2019. ECL Finance NCD offers to yield up to 10.41% interest rates. These are Secured Non Convertible debentures.
When the interest rate is less, the high-interest rate nonconvertible debenture definitely attracts investors.
Nowadays, there is a fear among the investors with the increasing scam and fraudulent activities whether to invest or not in such ECL finance?
You must be thinking whether you should invest your money in the ECL NCD 2019? What are the risk factors one should consider before investing in NCD?
Are you inquisitive to learn about all the above information? Stay tuned for the post!
About ECL Finance Limited
ECL Finance Limited is one of the well known eminent non-deposits taking NBFCs to hone in providing a broad range of secured loan products, retail loan products which are customized as per the need of the corporate, SMEs and individuals.
ECL provides structured collateralized credit; wholesale mortgages for finance to developers real estate projects under construction; credit facilities and short-term loans to SME’s and others; loans against securities; retail mortgages – loans against the property; and Agri credit.
The company came into existence in the year 2005 and is based in Mumbai, India.
It is a subsidiary of Edelweiss Financial Services Limited.
Let us have a look at its retail loan products
- Structured Collateralized Credit
The structure collateralized credit loans include 23.15% of its total loan as on March 31st, 2018. A structured collateral loan is granted to the corporate against pledge of other securities, liquid market securities, and pledge of shares by promoters and immovable property etc.
The loan consists of bridge financing or another small term loan to corporate.
The money raised is utilized for the working capital need of the corporate, expansion and diversification of business among the other users.
The duration of the loan is up to two years.
- Wholesale Mortgages
This consists of various structured financing solutions for finance to developers for the purpose of real estate projects under construction, which includes 35.46% of the company’s total loan book as of March 31, 2018.
- SME and other
This consists of credit facilities and short-term loans to SME for availing their monetary requirement, which constitutes 7.70% of the company’s total loan book as of March 31, 2018.
- Loans against securities
This consists of loans to investors against their existing investment portfolios which incorporate 21.00 % of the Company’s total loan book as of March 31, 2018.
- Retail Mortgages-Loans against property
This consists of loans offered to self-employed individuals for the business needs against mortgage of residential or commercial property, which include 6.67% of the company’s loan book as for March 31st, 2018.
- Agri Credits
As a part of agricultural value chain services short-term finance of duration of three to nine months against Agric commodities inventory stored in a warehouse managed by the sister concern of the company which includes 4.02 % of the company’s total loan book as at March 31, 2018.
Edelweiss NCD Issue Highlights:
ECL Finance Limited NCD – Issue Details:
|Issuer||ECL Finance Limited (View Report)|
|Issue Type||Secured, Redeemable Non-Convertible Debentures|
|Issue Period||Issue Opens: Monday, Nov 04, 2019|
|Issue Closes: Friday, Nov 22, 2019|
|Coupon Rate||10.41% p.a *|
|Issue Size||Base Issue of Rs. 100 Crores with an option to retain oversubscription up to Rs. 400 Crores aggregating upto 5,000,000 NCDs amounting to Rs.500 Crores (“Tranche II Issue Limit”) (“Tranche II Issue”) which is within the Shelf Limit of Rs. 2,000 Crores.|
|Face Value||Rs. 1,000 per NCD|
|Minimum Application Size||10 NCDs (Rs. 10,000) and in the multiple of One NCD thereafter|
|Credit Rating||‘‘CRISIL AA-/ Stable’’ and “CARE AA-/ Stable’’|
|Mode of Allotment & Trading||In Dematerialised Form|
|QIB||20% of issue size|
|Non Institutional||20% of issue size|
|HNI||30% of issue size|
|Retail Individual||20% of issue size|
|Depositories||NSDL & CDSL|
|Registrar||Link Intime India Private Limited|
|Book Running Lead Managers||Edelweiss Financial, Axis Bank, IIFL Holdings and Trust Investment Advisors|
Features of ECL Finance NCD Issue 2019 – Tranche-I
- The NCD issue start date is Nov 04, 2019.
- NCD Issue closes on Nov 22, 2019. However, these are first come, first serve basis.
- NCD’s are available in 7 options. It offers NCD for 39 months, 5 years and 10 years.
- These are secured NCDs.
- Interest payable every month or every year or on maturity depending on the option chosen by the investor.
- The face value of the NCD bond is Rs 1000.
- The minimum investment is for the 10 bonds. Means, you need to invest for a minimum of Rs 10,000. Beyond this, you can invest in multiples of 1 bond.
- These NCD bonds would be listed on BSE.
They are known as Liquid Investments.
Interest rates of ECL Finance NCD Issue 2019
*Effective Yield (Per Annum) for Edelweiss NCD:
SPECIFIC TERMS FOR EACH SERIES OF NCDs
|Frequency of Interest Payment||Annual||Cumulative||Annual||Cumulative||Monthly||Annual||Cumulative||Monthly||Annual|
|Minimum Application||Rs. 10,000/‐ (10 NCDs) across all Series|
|Face Value / Issue Price (Rs / NCD)||Rs 1,000|
|Tenor from Deemed Date of Allotment||24 months||24 months||39 months||39 months||60 months||60 months||60 months||120 months||120 months|
|Coupon (% per annum) for NCD Holders in Category I,II, III & Category IV||9.90%||NA||10.20%||NA||9.95%||10.40%||NA||9.95%||10.40%|
|Effective Yield (per annum) for NCD Holders in Category I,II, III and Category IV||9.90%||9.90%||10.20%||10.20%||10.42%||10.40%||10.40%||10.42%||10.40%|
|Amount (Rs./ NCD) on Maturity for NCD Holders in Category I, II, III &
|Maturity/Redemption Date (Months from the Deemed Date of Allotment)||24 months||24 months||39 months||39 months||60 months||60 months||60 months||120 months||120 months|
|Put and call option||N.A.|
|Mode of Interest Payment||Through various options available|
** The Company shall allocate and allot Series III NCDs wherein the Applicants have not indicated the choice of the relevant NCD Series.
What is the issue break-up?
Below listed is the issue break-up of this NCD (Non-Convertible Debentures).
- QIB – 20% of the issue
- Corporate – 20% of the issue
- HNI – 30% of the issue
- Retail – 30% of the issue.
The NCDs are proposed to be listed on BSE and NSE. The NCDs shall be listed within 12 Working Days from the date of NCD issue.
|IIFL NCD Jan 2019||HDFC NCD Issue 2019|
|IB Consumer Finance NCD||Shriram Transport NCD JAN 2019|
|Mahindra Finance NCD 2019||Manappuram Finance NCD 2019|
1) These Non Convertible Debentures have been rated by CRISIL as ‘CRISIL AA/Stable’ which indicates a Stable outlook.
2) These NCDs have been graded by ICRA as ‘ICRA AA (stable) which reveals a Stable outlook.
How is the company doing in terms of profits?
Its profits are mentioned below:
- Year ended Mar-2016 – Rs 155 Crores
- Year ended Mar-2017 – Rs 129 Crores
- Year ended Mar-2018 – Rs 142 Crores
- Basics of Mutual Fund
Reasons Why to invest in ECL Finance Ltd.?
Given below are the reasons to invest. Let’s have a read at the following
1) These NCDs (Nonconvertible debenture) provide winning interest rates where you can get a profit of up to 10.40% per annum.
2) This is a secured NCD issue. In case of any non-performance of the company and the company gets closed for some reason, NCD investors would get preference in repayment of capital along with the interest.
Hence it is safe to invest in such secured NCD options. However, it is only preference is given to NCD investors and no guarantee that the entire amount would be paid-back in such cases.
3) You can accrue and get a good amount for 39 months to 5 years tenure. As an example, if you invest Rs 1 Lakh for 5 years, you can get an additive amount of Rs 1.64 Lakhs.
Why not invest in ECL Finance NCD Issue 2019?
- The client’s default and non-performing of assets could skeptically harm a company’s business.
- The company might get affected by the volatility of the interest rate which could cause it to gross spreads to decline, and consequently, decrease its profitability.
- Company’s top listed borrowers have an exposure of 24.16% of company total exposure as on March 31, 2018.
- Company’s incompetence to sustain the relationship with their clients or any nonpayment or default or credit losses of single client or group exposure where they have substantial exposure can critically and materially affect company’s business, future finance performances and results of operations
- The company is accountable to supervision and regulation by the RBI, as an NBFC-ND-SI, and other regulatory authorities and changes in the RBI’s regulations and other regulations, and the regulation governing company or the industry in which company operates could adversely affect its business.
- Company’s inability to conform to the observation made by the RBI or any adverse action by RBI may have a material adverse effect on its business, financial condition and results of operation.
- Company’s inefficiency to obtain, renew or manage the statutory and regulatory permits and approval which are required to operate its existing or future business may have material adverse effects on its business, financial condition and results of operation
- The company may not be able to recover the full value of the collateral or amount which are sufficient to cover the outstanding amounts due under defaulted loans on a timely basis, which could adversely affect its financial condition and results of operation
- Company director that are involved in legal and other proceedings and there can be no assurance that the company director will be successful.
In the event, if they failed at litigating any disputes, the company’s business will suffer adversely.
- Company’s downturn in capital’s adequacy ratio could curb its future business growth
- Other Internal and external factors can be read at the risk factors of the NCD prospectus.
How to Apply for ECL Finance NCD Issue 2019?
ECL Finance NCD Issue of December Tranche-I of 2019 is obtainable in demat form only.
If you want to apply, then you can apply online for any of the broker websites where you are maintaining a demat account.
Otherwise, it is suggested to visit the ECL finance website for more updated information.
Investors, these ECL finance are regarded as safe and secure. However, due to recent IL & Fs scams, it seems risky to invest in such non-convertible debentures.
It is requested to be careful and cautious while making an investment decision.
Dear readers, if you enjoyed reading our article about ECL Finance NCD issue 2019, please share it among friends and peers through Facebook and Twitter.
We hope that this article has been of valuable assistance for curious investors.
If you have any suggestion pertaining to the post, please feel free to reach us through the comment section mentioned below.
We would love to hear from you.
I am elated to share my knowledge about “ECL finance with you”
Always remember that investment in knowledge pays the best returns. So, be careful while investments do not get influenced easily.
Have a great day & all the good luck for the future.
Thanks for reading