11% Edelweiss Financial Services NCD Oct-2024 Issue Details
Edelweiss Financial Services is coming up with NCD issue that would open for subscription on October 7, 2024. Edelweiss Financial Services is a leading investment banking company which has diversified businesses across retail, corporate credit, wealth management, etc. NCD interest rates are up to 11%. These NCDs are offered for the tenure of 24 months, 36 months, 60 months and 120 months. Interest on these NCDs is paid either monthly, yearly or on maturity depending on the option chosen by an investor. Should you invest in Edelweiss Financial Services NCD Oct-2024 issue? What are the risk factors one should consider before investing in such high risk NCDs?
About Edelweiss Financial Services Limited
This investment banking company, through its subsidiaries has diversified its businesses to include credit, including retail and corporate credit, wealth management, asset management, asset reconstruction and insurance including life and general insurance businesses, which are conducted through its subsidiaries.
Edelweiss Financial Services NCD Oct-2024 – Issue Details
Here are the NCD issue details.
Subscription opening Date
07-Oct-24
Subscription closure Date
18-Oct-24
Issuing Security Name
Edelweiss Financial Services Limited
Security Type
Secured, Redeemable, Non-Convertible Debentures
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
I to XII
Minimum Lot size
10 bonds and 1 bond there after
Tenure
24, 36, 60 and 120 months
Interest Payment frequency
Monthly and Annuallly
Listing on
Within 6 working days on BSE
Lead Manager
Trust Investment Advisors Private LimitedNuvama Wealth Management LimitedTipsons Consultancy Services Private Limited
Debenture Trustee/s
Beacon Trusteeship Limited
Edelweiss Financial Services NCD Interest Rates
Series
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
Frequency of Interest Payment
Annual
NA
Monthly
Annual
NA
Monthly
Annual
NA
Annual
Monthly
Annual
Annual
Tenure (months)
24
24
36
36
36
60
60
60
60
120
120
120
Coupon (% per Annum)
9.50%
NA
9.57%
10.00%
NA
10.04%
10.50%
NA
10.50%
10.49%
11.00%
11.00%
Effective Yield (% per Annum)
9.50%
9.50%
10.00%
10.00%
10.00%
10.51%
10.49%
10.50%
10.50%
11.00%
10.99%
10.99%
Amount on Maturity (In Rs.)
1,000
1,199
1,000
1,000
1,331
1,000
1,000
1,647.90
1000*
1,000
1,000
1000*
Why to invest in Edelweiss Financial Services NCD Oct-2024?
Let us review the positive factors in this NCD issue.
1) This NCD offers attractive interest rates where investors can get interest up to 11% per annum.
2) It issues secured NCDs. Secured NCDs are always safe compared to unsecured NCDs. In case a company gets wind-up/shut down for some reason, secured NCD investors would get preference in repayment of capital along with interest as those backed up by assets of the company.
3) These NCDs are rated as CRISIL A+/Watch Negative (placed on ‘Rating Watch with Negative Implications’). NCD instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry a low credit risk.
4) Investors have an opportunity to lock their investments with investments at higher interest rates.
5) These NCD bonds are listed on stock exchanges, hence one can sell them based on the availability of the buyers.
Why not to invest in Edelweiss Financial Services NCD?
Let us review some of the negative factors or risk factors in this NCD issue.
1) While Company NCD ratings are A+/Watch Negative, CRISIL has downgraded these ratings from AA+/Stable to A+ in 2023 and now to A+/Watch Negative.
2) NCD’s of Series IX and XII have redemption of capital amounts in staggered manner. Means investors would get the principal amount in installments.
3) High levels of customer defaults and the resultant non-performing assets could adversely affect its business, financial condition, results of operations and future financial performance.
4) Refer Edelweiss Financial Services October-24 NCD prospectus for complete risk factors.
Edelweiss Financial Services NCD – Should you invest?
These NCD’s offer high interest rates. Though banks have increased the FD interest rates in the last few quarters, they are still low compared to the interest rates offered in these NCDs. These NCDs are rated as CRISIL A+/Watch Negative. Also, secured NCD bonds are relatively safer compared to unsecured bonds while risk is not 100% eliminated.
On the other hand, last year these NCD credit ratings were downgraded and such ratings can change in the future too. In the last 5 years, company revenues have fallen and margins were shrinking, however, started regaining from FY23 onwards. One should not forget about some of the NBFC companies defaulted on NCD payments earlier and some NBFCs delaying NCD re-payments in the last few years.
High risk investors who understand all these risk factors can invest in these NCDs.
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)
