10.75% Indiabulls Housing Finance NCD May 2024

Indiabulls Housing Finance NCD May 2024 – Introduction
Indiabulls Housing Finance Limited is coming up with secured NCD bonds, which would open for subscription today. Indiabulls Housing Finance Limited is one of the leading housing finance companies (HFCs) in India in terms of AUM. The NCD interest rates for Indiabulls Housing Finance NCD are up to 10.75%. These NCDs have a tenure of 24 months to 120 months, and interest is paid either monthly, yearly, or upon maturity. Should you invest in Indiabulls Housing Finance NCDs of the May, 2024 issue? What are the risk factors one should consider before investing in such high-risk NCDs? Lets review this in this article.
Also Read: 15 Most Recommended Mutual Funds to invest in 2024

About Indiabulls Housing Finance Limited
Company is one of the largest housing finance companies (HFCs) in India in terms of AUM. They are a non-deposit taking HFC registered with the NHB.
Company primarily focuses on long-term secured mortgage-backed loans. Majority of its loan book comprises of secured loans. They primarily offer housing loans and loans against the property to its target client base of salaried and self-employed individuals and micro, small and medium-sized enterprises. They also offer mortgage loans to real estate developers in India in the form of lease rental discounting for commercial premises and construction finance for the construction of residential premises.

Indiabulls Housing Finance NCD May 2024 – Issue details
Here are the issue details.

Subscription opening Date
13-May-24

Subscription closure Date
27-May-24

Issuing Security Name
Indiabulls Housing Finance Limited

Security Type
Secured, Redeemable, Non-Convertible Debentures (Secured NCDs)

Issue Size (Base)
Rs 100 Crores

Issue Size (Option to retain over subscription)
Rs 100 Crores

Total issue size
Rs 200 Crores

Issue price
Rs 1,000 per bond

Face value
Rs 1,000 per bond

Series
Series I to XII

Minimum Lot size
10 bonds and 1 bond there after

Tenure
24, 36, 60, 84 and 120 Months

Interest Payment frequency
Monthly, Annual and Cumulative

Listing on
Within 6 working days on BSE

Lead Manager
Nuvama Wealth Management LimitedElara Capital (India) Private LimitedTrust Investment Advisors Private Limited

Debenture Trustee/s
IDBI Trusteeship Services Ltd.

Indiabulls Housing Finance NCD May 2024 – Interest rates
As per the Indiabulls Housing Finance NCD May-2024 prospectus filed with BSE, here are the Indiabulls Housing Finance interest rates. Investors should note that for specific tenure NCDs, the principal amount is repaid in installments, which is the biggest drawback in these NCDs. Please refer to the redemption schedule for more details.
Indiabulls Housing Finance NCD May 2024 – Credit Ratings
These NCDs have been rated CRISIL AA / Stable by CRISIL Ratings and ICRA AA Stable by ICRA. Instruments with this rating are considered to have the highest degree of safety in terms of timely servicing of financial obligations, carrying very low credit risk.
How is the company doing in terms of profits?
Here are the details of the consolidated profits of the company.

Year ending Mar-2020 – Rs 2,165 Crores
Year ending Mar-2021 – Rs 1,201 Crores
Year ending Mar-2022 – Rs 1,177 Crores
Year ending Mar-2023 – Rs 1,129 Crores

Reasons to Invest in Indiabulls Housing Finance NCD May 2024

Indiabulls Housing Finance bonds offer attractive interest rates, allowing investors to earn up to 10.75% per annum.
The company issues secured NCDs, which are safer compared to unsecured NCDs. In the event of the company winding up or shutting down for any reason, secured NCD investors would receive preference in the repayment of capital along with interest, as these NCDs are backed by the company’s assets. Therefore, investing in such secured NCD options is considered safe.
The company holds a good credit rating of AA/Stable from both CRISIL and ICRA.
It provides 12 flexible investment options, allowing investors to choose the one that best suits their preferences.

Risk Factors in Indiabulls Housing Finance NCD May 2024

The company’s profits are on a declining trend.
The redemption of NCD amounts is done in splits for Series VI and above, meaning investors would not receive their principal amount in a lump sum upon maturity.
Previous outbreaks of COVID-19 and lockdowns have impacted the company’s business. Any future outbreaks cannot be predicted and may affect the company’s operations.
An increase in Non-Performing Assets (NPAs) can negatively impact the business.
Please refer to the prospectus for a comprehensive list of risk factors.

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Indiabulls Housing Finance NCD May 2024 – Should you invest or avoid?
Despite increase in FD interest rates by banks and NBFCs, Indiabulls Housing Finance NCDs continue to offer high-interest rates and yield. These NCDs are rated as AA Stable by ICRA and CRISIL which are considered to have good ratings.
However, one should note that such credit ratings are subject to change at any time. Investors should not forget about DHFL case, where NCD investors lost money. There have been occasions where NBFCs delayed interest payments and the repayment of investment amounts to investors. Additionally, some NCD series of this NCD issue offer the repayment of capital in installments.
High risk investors can invest in such NCDs if they are willing to consider all these risk factors.

Suresh KP is the Founder of Myinvestmentideas. He is NISM Certified – Investment Adviser and NISM Certified – Research Analyst. He has been analyzing financial markets in the last 20 years.He can be reached at suresh@myinvestmentideas.com Latest posts by Suresh KP (see all)