Dhani Loans and Services previously called Indiabulls Consumer Finance has come up with secured NCDs for investment. For freshers, NCD are fixed income instruments which bear return depending on the scheme i.e. quarterly, annually or cumulative.
Issue size: Base issue size: Rs. 150 crore with an option to retain over-subscription up to Rs. 150 crore aggregating Rs. 300 crore in value.
Issue period- January 4-January 27, 2021
These NCDs by the NBFC subsidiary are secured in nature i.e. backed by a cover of 1.25 times on the principal and interest thereon.
Minimum investment: Rs. 10000
The company is a NBFC registered with RBI and offers a gamut of financing facilities offline and online. The company is a non-deposit taking 100% subsidiary of Dhani Services Limited. As digitization transformed the banking and financial sector, the company recognized a great opportunity and ventured into the retail lending space with Dhani Loans and Services Limited.
IVR AA/ Stable outlook- This rating by Infomerics signifies low credit risk and hence there is likely a probability of timely servicing of obligations.
Interest rate and tenure of payment
|Option||Tenure in months||Interest payment||Coupon Interest||Effective Yield|
It is a good bet considering the low interest rate regime with security extended as being secured in nature. Further, the highest coupon rate of 11 percent for a 3 years term is a good bet, if at all the rates even trend higher in some time. However be mindful of deploying not a huge chunk of your investible surplus as anytime the rating of the debenture can change.
Also, as regards its financials the company has been incurring losses for some time, so to some analysts and experts the higher 'A' rating is not in sync. So at best the instrument shall be a good bet for high risk profile investors.