Edelweiss Finance & Investments Ltd NCD (EFIL NCD Jan 2020) Detail

 Edelweiss NCD Issue 2020, Features, Credit Rating, Reasons to Invest, why not to invest? & How to apply?

Greeting Investors

You are welcome in our post about “EFIL NCD Issue 2020.”

What is EFIL?

EFIL – Edelweiss Finance & Investment Ltd. is a leading nonbanking financing company that proffers corporate loan products, retail loan products which are customized to the need of the corporation.

EFIL Finance NCD 2020 Tranche-I Public Issue would open for subscription on Jan 23, 2020. EFIL Finance NCD offers to yield up to 10.25% interest rates. These are Secured Non Convertible debentures.

When the interest rate is less, the high-interest rate of 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 Edelweiss Finance & Investments Ltd?

You must be thinking whether you should invest your money in the EFIL NCD 2020? 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 EFIL Finance Limited

Edelweiss Finance and Investments Limited are presently engaged in the business of granting loans against securities, ESOP financing, margin trade financing, and IPO financing.

EFIL product portfolio currently comprises of granting loans against securities, margin trade financing, and IPO financing. We provide loans to our customers against the pledge of certain specified securities held by such customers. The product is offered to customers who require liquidity against their investments in certain specific marketable securities including equity shares, units of mutual funds, bonds, debentures, and structured products.

The company came into existence in the year 2005 and is based in Mumbai, India.

Let us have a look at its products

  • LOAN AGAINST SECURITIES

Edelweiss Finance and Investments Limited grant loans against securities to persons against specific marketable securities which is offered to customers, who require liquidity against their investments in specific marketable securities including equity shares, units of mutual funds, fixed income instruments (such as government securities, corporate bonds with a long term rating of AA- and above) and others (including units of AIFs and market-linked debentures).

The maximum tenor of such loans is up to 30 months.

  • IPO FINANCING

EFIL provides customers, desiring to subscribe to initial public offerings of companies as well as other fundraisings by listed companies, with short-term loans, against margins maintained by such customers with us.

Post allotment of the securities to our customers, such shares are to be pledged in our favor as security against the loan availed. The tenor of such loans would be generally seven days. The loan can only be used by the borrower for the purchase of the securities.

  • ESOP FINANCING

It provides loans to employees of corporates, empaneled with the Edelweiss group, to fund the acquisition of shares, on the exercise of options granted to them. The loans granted are secured by a pledge of the shares issued to such employees on the exercise of the options granted to them.

The tenor of such loans is typically for a period of 30 months. The loans can only be used for purchasing the shares on exercise of the ESOPs.

  • MARGIN TRADE FINANCING

We provide customers who meet our specific credit criteria with margin trade financing. Such customers are required to maintain a margin in the form of securities with us. We would provide the customers with short term financing for the purchase of securities and holding positions against such margin.

The tenor of such a financing facility is typically thirty months. The facility can only be utilized for investing in capital markets.

Edelweiss NCD Issue Highlights:

Edelweiss Finance Limited NCD – Issue Details:

Issuer Edelweiss Finance and Investments Limited
Issue Type Secured, Redeemable Non-Convertible Debentures
Issue Period Issue Opens: Jan 23, 2020
Issue Closes: Jan 31, 2020
Coupon Rate 10.25% p.a *
Issue Size Base Issue of Rs. 125 Crores with an option to retain oversubscription up to Rs. 250 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
Listing BSE
Depositories NSDL & CDSL
Registrar Link Intime India Private Limited
Book Running Lead Managers
  1. Edelweiss Capital Limited
  2. IDBI Capital Market Services Limited
* Highest yield

Features of EFIL NCD Issue 2020

  • The NCD issue start date is Jan 23, 2020.
  • NCD Issue closes on Jan 31, 2020. However, these are the 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 Edelweiss NCD Issue 2020

Effective Yield (Per Annum) for Edelweiss NCD:

SPECIFIC TERMS FOR EACH SERIES OF NCDs

Coupon Rates for Eash Series

Series 1 Series 2 Series 3 Series 4 Series 5 Series 6 Series 7 Series 8 Series 9
Frequency of Interest Payment Annually Cumulative Annually Cumulative Monthly Annually Cumulative Monthly Annually
Tenor 18 Months 18 Months 36 Months 36 Months 60 Months 60 Months 60 Months 120 Months 120 Months
Coupon Rate (Retail) 9.70% NA 10.00% NA 9.80% 10.25% NA 9.80% 10.25%

What is the issue break-up?

Below listed is the issue break-up of this NCD (Non-Convertible Debentures).

  1. QIB – 20% of the issue
  2. Corporate – 20% of the issue
  3. HNI – 30% of the issue
  4. 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.

What is the Credit Rating of these NCDs?

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 EFIL 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 10.25% 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 EFIL Finance NCD Issue 2020?

  • 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 Edelweiss Finance NCD Issue 2020?

Edelweiss Finance NCD Issue 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 Edelweiss Finance & Investments Ltd website for more updated information.

Investors, these EFIL 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.

Conclusion

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Have a great day & all the good luck for the future.

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