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Mannapuram 10.4% NCD Issue Opens: Should You Invest?
Even as the debt investments have gained traction amid huge stock market volatility, NCDs have taken a backseat owing to the recent liquidity crisis faced by infrastructure financing NBFC company IL&FS. And given the turmoil, we will elaborate on the newly open Manappuram Finance Ltd NCD issue.
Issue details: The issue by gold loan company is open from October 24 to November 22, 2018. The issue size is Rs. 1000crore with an option of extension beyond the pre-decided date or early closure as decided by the company Board of Directors. It is to be noted that the base issue size is Rs. 200 crore with an oversubscription option up to Rs. 800 crore.
Credit rating: CARE AA/Stable by CARE Ratings and BWR AA+ Stable by Brickwork Ratings India Private Ltd.
A. K. Capital Services Ltd and Edelweiss Financial Services Ltd are the lead managers of the issue.
NCDs are available in 10 options and interest offering is in the range of 9.6% to 10.4%. The face value of the bond is Rs. 1000 and minimum application amount is Rs. 10,000 across all the NCD issue series.
Interest rate option:
| Series | I | II | III | IV | V | VI | VII | VIII | IX | X |
|---|---|---|---|---|---|---|---|---|---|---|
| Interest payment frequency | Cumulative | Monthly | Monthly | Annual | Annual | Annual | Cumulative | Cumulative | Cumulative | Cumulative |
| Tenure | 400 days | 36 months | 60 months | 24 mths | 36 mths | 60 mths | 24 months | 36 mnths | 60 mnths | 2557 days |
| Coupon % | NA | 9.6% | 10.0% | 9.85% | 10% | 10.4% | NA | NA | NA | NA |
How good is the investment in Mannapuram NCD issue?
In the current scenario, even with a handful of benefits these NCD issues come with such as higher interest rate, liquidity due to their listing on the exchanges, investors are advised to exercise extra caution and not allocate a higher percentage of their fixed investment portfolio into these investments.
