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10.5% IIFL NCD Issue Opens: Should You Invest?

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IIFL, the NBFC company, has opened a NCD issue today which will remain open for subscription until August 20. Here is a low down on the details on the issue and which investor category should consider the issue for investment:

Here is a low down on the details on the issue and which investor category should consider the issue for investment:
 

Here is a low down on the details on the issue and which investor category should consider the issue for investment:

1. Issue details: The minimum application for such NCDs can be placed for Rs. 10000. Through the issue, company wishes to aggregate a minimum of Rs. 100 crore with the option to retain another ₹900 crore in case of oversubscription.

2. Company details: The company is engaged in the area of financing, mortgage , wealth and asset management, retail and institutional broking and investment banking.

3. NCD rating: The NCD offer has been rated AA (stable) by CRISIL and ICRA. They have been rated AA+ (stable) by Brickwork Ratings.

4. Tenure and interest rate: The NCDs are being offered in VI series. While the series I-IV are secure, the remaining two i.e. V and VI are unsecured.

Series I II III IV V VI
Frequency of Interest payment N.A Quarterly N.A Annual Monthly N.A
Face Value / Issue Price (Rs/NCD) Rs. 1000 per NCD
Tenure (In Months) 15 months 39 months 39 months 39 months 69 months 69 months
Nature of Indebtedness Secured Redeemable Non-Convertible Debenture Unsecured Redeemable Non-Convertible Debenture
Coupon (% p.a) for all categories N.A 9.50% N.A 9.85% 10.00% N.A
Effective Yield (% p.a) for all categories 10.00% 9.84% 9.85% 9.85% 10.47% 10.50%
 How to apply in IIFL NCD issue?

How to apply in IIFL NCD issue?

If you want to invest in the IIFL NCD issue then do it through you banker or broker and authorize the same to block the amount for which you want to invest in the NCD issue. The banks catering to such a facility are SCSB or self-certified syndicate bank (SCSB).

Should you subscribe to IIFL NCDs?
 

Should you subscribe to IIFL NCDs?

You can obviously invest in the issue if you have a higher risk appetite that said you can afford the risk of the issuing company defaulting on principal and interest payment. Further two of the series are unsecured so carry all the more risk. And if you still can manage with the risk that comes at a high fixed interest rate go in for a shortest tenure.

Also, these instruments though traded offer low liquidity, so align your long term goals accordingly. Further, the interest that you get on these NCDs are taxed as per your slab rate.

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