Indiabulls Consumer Finance NCD 2019 Public Issue : 10.61% IB NCD Details & Review

Indiabulls Consumer Finance NCD 2019 Public Issue: IB Consumer Finance NCD Details, Features, Credit Rating, Reasons to Invest, Price, Date, Allotment, Listing, Reviews, Status & How to Apply?

Non Convertible Debentures are one of the fixed income options that quench investors hunger.

The interest rate proffered by the fixed deposits schemes may have touched the lowest levels which compel the investors to look out for better investment options.

India bulls consumer Finance Ltd is all set to launch the NCD issue. It is going to offer secured redeemable NCD.

Indiabulls Consumer Finance Limited NCD 2019

The proposed public issue of these Bonds will be open for subscription from 30th May 2019 to 21st June 2019.

The yield has high as 10.61% per annum and attracting customers now. India bulls consumer finance limited has great from Brick Works Ratings and CARE.

Should you invest in Indiabulls Consumer Finance NCD of May/June 2019? What are the factors an investor should consider before investing  Indiabulls Consumer Finance NCD of 2019? In this article, I would state interesting insights about IB Consumer Finance Ltd NCD.

So, today’s post is centered around India Bulls NCD.

Stay tuned with the end to read about Indiabulls NCD also check Upcoming NCD in 2019.

What is Debenture?

The debenture is a kind of debt instrument which offers a fixed rate of interest for a specified tenure.

Many companies and government resort to debenture for the purpose of borrowing money. In simple words, it is the loan taken by the company and do not provide ownership in the company.

What are Non-Convertible Debentures?

There are two kinds of debentures convertible and non-convertible debentures. The convertible debentures are those that can be converted into the equities shares at a later time.

But, the interest rate offered by such debentures is low. Nonconvertible debentures do not get converted into the equity shares at a later time thus, can generate higher returns.

An NCD can be Secured or Unsecured. Secured NCDs are backed by the issuer company’s assets to fulfill the debt obligation, unlike unsecured NCDs.

About Indiabulls Consumer Finance Limited

Indiabulls consumer finance limited came into the existence in the year 1994 is a wholly owned subsidiary of Indiabulls Ventures Limited, one of the financial services companies of Indiabulls group engaged in providing securities and derivative broking services.

The company is registered as a non-deposit taking systematically important in a banking finance company and the primary focus on personal loans, unsecured SME loans, and secure SME loans.

IB Consumer Finance NCD 2019 Public Issue Details

Indiabulls Consumer Finance is all set to issue secured redeemable Non-Convertible Debentures (NCD’s) to the tune of Rs 250 Crores with a choice to retain another Rs 2,750 Crores over subscription totaling to Rs 3,000 Crores. It comes with 8 different options, which contains 26 months, 38 months and 60 months tenure NCDs.

Indiabulls Consumer Finance NCD 2019 Public Issue | Key Features

On March 31, 2018, its gross NPAs as a percentage of AUM was 0.05%, and net NPAs as a percentage of AUM was 0.05%.

Below I have stated  the few important details about upcoming Indiabulls Consumer Finance NCD 2019  (FY 2018-19) ;

Indiabulls Consumer Finance Limited NCD – Issue Details:

Indiabulls Consumer Finance Limited NCD – Issue Details:

• NCD Issue Opening Date: Thursday, 30 May, 2019
• Issue Closes on:  Friday, 21 June, 2019
• Interest Rate or Coupon Rate on NCDs: The ROI ranges from 10.40% to 10.61% depending on the category of investor and tenure of the NCDs.
• Issue Size: Base Issue size is Rs 250 cr (with an option to retain over-subscription amount of up to Rs 2,750 cr for Tranche-I.)
• Mode of Issue: Demat only
• Face Value or Issue Price of one NCD is Rs 1,000.
• Available Tenor options : 26 / 38 / 60 months
• The frequency of Interest payment: Monthly & Annual. Cumulative options are also available.
• Minimum Application size: Rs 10,000 (10 NCDs) and in multiples of Rs 1,000 thereafter.
• Listing: The NCDs are proposed to be listed on BSE & NSE stock exchanges.
• Security & Asset Cover: The Company and Promoter will create and maintain appropriate security in favor of the Debenture Trustee for the NCD Holders on the assets adequate to ensure required asset cover for the Secured NCDs.
• Credit Ratings: Credit Rating of “CARE AA; Outlook: Stable” for an amount of Rs. 3,000 crore, by CARE Ratings Limited and “BWR AA+; Outlook: Stable” for an amount of Rs. 3,000 crore, by Brickwork Ratings.
• Issue Allocation Ratio: 30% of the Issue is for retail investors & 30% for HNIs (HNIs – individuals (applying for an amount of > Rs 10 lakh).
• PUT & Call options: Put & Call options are not available. (What are Put & Call options? – NCDs can have Put or Call options. If a company issues a ‘Callable Debenture’, it means that it can be redeemed by the Issuer (company) before the bond’s maturity. A debenture with a ‘Put option’ works in exactly the opposite manner, wherein the investor can sell the bond to the issuer at a specified price before its maturity.)
• Allotment of NCDs is on ‘first come, first serve’ basis.
• NRIs are not eligible to apply to this NCD issue.
• Upcoming IPO Calendar 2019

Interest Rates for Indiabulls Consumer Finance NCD 2019

Effective Yield

Series	I	II	III	IV	V	VI	VII	VIII	IX
Frequency of Interest Payment	NA	Annual	NA	Monthly	Annual	NA	Monthly	Annual	NA
Tenor	400 days	24 months	24 months	36 months	36 months	36 months	60 months	60 months	60 months
Coupon (% per annum) for NCD Holders in Category I, II, III & Category IV	NA	10.27	NA	9.95	10.41	NA	10.13	10.61	NA
Effective Yield (% per annum) for NCD holders in Category I, II, III & IV	10.00	10.25	10.25	10.41	10.40	10.40	0.106	0.106	0.106
Call and put Option	NA
Amount (Rs / NCD) on Maturity for NCD Holders in Category I, II, III & IV	1110.10	1000	1215.83	1000	1000	1345.94	1000	1000	1655.83
Minimum Application	Rs 10,000 (10 NCDs) across all Series collectively
In Multiples of thereafter	Rs. 1,000 (1 NCD)
Face Value / Issue Price (Rs Per NCD)	Rs. 1,000
Mode of Interest Payment	Through various options available

What is the Issue Break-up?

Have a look at the issue break up

• QIB Portion – 20% of the issue
• Corporate Portion – 20% of the issue
• High Net Worth Individuals – 30% of the issue
• Retail Investors – 30% of the issue

What is the Credit rating of the Indiabulls Consumer NCD issue?

This NCD is rated by Brick Works Ratings (BWR) AA+/Stable. And from Care AA stable Outlook by IND ratings which clearly says that these NCDs have a high degree of safety regarding timely servicing of financial obligation and carry low credit risk. Isn’t it applauding

How is the company doing in terms of Financials?

1. Interest income was Rs 6.6 Crores for FY16 Vs Rs 26.2 Crores for FY2018.
2. Net profit improved from Rs 1.3 Crores in FY16 to Rs 191.5 Crores in FY18.
3. Net NPA is at 0.05% as of March 31, 2018.

Debentures & Taxation

• TDS is not applied to the listed debentures’ interest payouts (which are in Demat form). Else, TDS will be applicable if the interest exceeds the threshold limit of Rs.5,000/- in a financial year.
• Interest yield on NCD bonds is taxable according to the slab of the investor.
• If you sell NCDs on stock exchange before one year from the date of purchase, Short Term Capital Gains Tax is applicable. Tax rates depend will solely depend on the tax slab you fall into.
• If you sell NCDs on stock exchange before maturity but after one year, Long Term Capital Gains Tax (if any) at 20% with indexation & 10% without indexation is applicable.

When this  Indiabulls Consumer Finance NCD of 2019 would get listed on BSE?

These Indiabulls Consumer Finance Limited NCDs of May/June 2019 would get listed after 6 working days from the date of closure. Means it would get listed approx. On 13th March 2019 assuming that it would continue till 4^th March 2019 i.e. the last date of subscription. If it is subscribed earlier and subscription closes, it would get listed after 6 days from such closure.

Why to Invest in IB Consumer NCD?

• India bulls finance is one the topmost NBFC in India
• The interest rate offered is lucrative i.e 10.61% yield
• The company enjoys a great credit rating by Brickworks and CARE.
•  It is issuing secured NCDs which are safe to invest compared to other unsecured NCDs.

Why not invest in  Indiabulls Consumer Finance 2019 NCD?

The obvious reason is due to the instability of Indian economies and banking sector could affect the liquidity of the company, which could have a material adverse effect on the company’s financial condition

High level of clients defaults and the resultant non-performing assets could adversely affect its company business,  financial condition, results of operation and future financial condition.

The company’s business is doing well in the past. Any inability to maintain its growth effectively may have a material adverse effect on its company financial condition

the company inability to maintain relationships with top customers or any nonpayment in the future or credit losses could hamper the company reputation

They are prone to the volatility in interest rates and may face interest rate and maturity mismatches between its assets and liabilities in the future which may cause liquidity issues.

The company is subject 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 business requires considerable capital and any disruption in the sources of its funding or an increase in its average cost of borrowings could have a material adverse impact on the company.

The investors can check all the risk factors in the company’s prospectus.

Should you Invest in Indiabulls Consumer Finance NCD of 2019?

Before you invest in this NCD consider few questions that are stated below

• as NBFC company are suffering liquidity crunch and then there is a possibility of delay in the payment of interest. Do you want to invest in such NCD then?
• Tenure of these NCD’s is for 26 months, 38 months and 60 months tenure. Do you want to park your money in high-risk NCD for 5 years? We do not know how the company would perform in 5 to 10 years, hence you should always invest in short term NCDs.You can look for 26 months or 38 months secured NCDs as these are for short term and they are secured in nature
• Higher the yield, higher the risk
• Are NCDs totally risk-free? – No, they are not risk-free. These carry a higher risk than bank deposits. The main risk with NCDs is default risk. The issuer may not be able to pay the interest payments.

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How to Apply the IB Consumer Finance NCD Issue of 2019?

The investor can apply to this NCD in a demat form only.

If you have a demat account, you can log in to your account and go to IPO/NFO/NCD section and apply for the same.

The procedure for applying NCD would be through ABSA (Your amount would be blocked initially and upon allotment, your amount would be deducted and NCD allotment would be done, else your amount would be unblocked) You can reach out to any of the lead managers websites to know more details on how to apply them.

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Final Words

India Bulls finance limited offers lucrative interest rates. Secured NCD is somewhat better than unsecured.

In investment, it is always suggested to take a well-informed decision.

If you are a high-risk taker and willing to invest in such companies even after IL and FS scam, you can consider investing in secured NCD FOR 26 Months or 38 Months.

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