ECL Finance Limited NCD 2019- Tranche-I
ECL Finance Limited is one of the leading systemically important non-deposit taking NBFCs, focused on offering a broad suite of secured corporate loan products, retail loan products which are customized to suit the needs of the corporates, SMEs and individuals. Our corporate and retail loan products include:
(i) Structured Collateralised Credit: Our structured collateralized credit loans constituted 18.97% of our total Loan Book as per Ind AS as at December 31, 2018. Structured collateralized credit loans are offered mostly to corporates against collateral such as liquid market securities, pledge of other securities, pledge of shares by promoters, immovable property, etc. The loans include bridge financing or other short term loans to corporates. The funds raised are utilized for the working capital requirement of the corporates, expansion, and diversification of business among other uses. The tenure of the loans is generally up to two years
(ii) Wholesale Mortgages: This includes various structured financing solutions for finance to developers for real estate projects under construction, which constituted 37.78% of the Company’s total Loan Book as per Ind AS as at December 31, 2018.
(iii) SMEs and others: This includes credit facilities and short term loans to SMEs for meeting their business requirements, which constituted 11.67 % of the Company’s total Loan Book as per Ind AS as at December 31, 2018.
(iv) Loans against securities: This includes loans to investors against their existing portfolio of investments, which constituted 17.16 % of the Company’s total Loan Book as per Ind AS as at December 31, 2018.
(v)Retail Mortgages – Loans against Property: This includes loans offered to self-employed individuals for business purposes against a mortgage of residential or commercial property, which constituted 12.57 % of the Company’s total Loan Book as per Ind AS as at December 31, 2018.
(vi) Agri Credit: As a part of agricultural value chain services, we extend short term finance (usually for a period of three to nine months) against agri commodities inventory stored in warehouses managed by the sister concerns of the Company, which constituted 1.85 % of the Company’s total Loan Book as per Ind AS as at December 31, 2018.
Objective of NCD ECL Finance Limited NCD 2019- Tranche-I:
Public Issue by ECL Limited secured non-convertible debentures of Face Value 1000 each for an amount of 150 Cr with an option to retain over-subscription of 150 Cr amounting to 300 Cr( Tranche-I Issue Limit) under a self-limit of 2000 Cr.
1. For the purpose of onward lending and for repayment of interest and principal of existing loans.
2. For general corporate purposes.
ECL Finance Limited NCD 2019- Tranche-I Details:
| Open Date: | May 10 2019 |
| Close Date: | Jun 06 2019 |
| Issue Size: | ₹ 300 Cr. |
| Face Value: | ₹ 1000 Per NCD |
| Market Lot: | 10 NCD |
| Listing At: | BSE |
Promoters:
The promoter is Edelweiss Financial Services Limited.
Credit Rating:
(i) ‘‘CARE AA; Positive’’ (pronounced as CARE AA with Positive outlook) for an amount of 2000 Cr, by CARE Ratings Limited vide their letter dated April 10, 2019, and
(ii) “CRISIL AA/Stable” (pronounced as CRISIL double-A rating with Stable outlook) for an amount of 2000 Cr, by CRISIL Limited vide their letter dated April 18, 2019.
The rating of “CARE AA; Positive” by CARE Ratings Limited and “CRISIL AA/Stable” by CRISIL Limited indicate that instruments with these ratings are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
Interest Rates:
| Series | I | II | III | IV | V | VI | VII | VIII | IX |
| Freq of Interest Payment | Annual | Cumulative | Annual | Cumulative | Monthly | Annual | Cumulative | Monthly | Annual |
| Minimum Application | Rs 10,000/- (10 NCDs) across all Series | ||||||||
| FV/ Issue Price | Rs1,000/- | ||||||||
| In Multiples of thereafter | 1,000/- (1 NCD) | ||||||||
| Tenor | 24 M | 24 M | 39 M | 39 M | 60 M | 60 M | 60 M | 120 M | 120 M |
| Coupon (% per annum) | 9.90% | NA | 10.20% | NA | 9.95% | 10.40% | NA | 9.95% | 10.40% |
| Effective Yield | 9.90% | 9.90% | 10.20% | 10.20% | 10.42% | 10.40% | 10.40% | 10.42% | 10.40% |
| Amount (NCD) on Maturity | 1000 | 1208.1 | 1000 | 1371.81 | 1000 | 1000 | 1640.9 | 1000 | 1000 |
Post Tax returns:
(i) Sold after Maturity The interest earned through NCDs will be added to the total income and will be taxed at 5%, 20%, and 30% respectively depending upon the income slab of an Individuals.
(ii) Sold Before Maturity If you decide to sell the NCDs on the stock exchange, capital gains can also arise. If NCDs are sold within a period of 12 months from the date of allotment, short term capital gains/loss (STCG) will arise and if you decide to sell NCDs after a period of 12 months, the resulting gain or loss is called long term capital gains/loss (LTCG).
Recommendation:
Review and Recommendation of ECL Finance Limited NCD by InvestorZone team => 6/10
1-5: Fair
5-7: Good
7-10: Excellent
Lead Manager of ECL Finance Limited NCD 2019- Tranche-I:
- Axis Bank Limited
- Edelweiss Capital Limited
Registrar of ECL Finance Limited NCD 2019- Tranche-I:
- Link Intime India Private Limited
Discussion on ECL Finance Limited NCD 2019- Tranche-I:
12 Comments
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shall we invest on this or not ? Plz suggest.
Indiabulls ka update karo na sir ji.. Aur apki recommendation kya he
Avoid India Bulls as of now. The Bond market is going through its toughest time.
Ncd ke bhav stock market ki tarah up down ho sakte he??
Agar ha to fir use bech bhi sakte he na??
Bhav ke up down pe yield pe koi asar to nahi hoga na???
Yes. NCD ke bhav upar niche hote hai as per the market condition. Nhn yield pe koi asar nhn hota. joh interest rate company promise karti hai utna milta hai.
Man loh aaj aapne NCD liya jiska rate 1000 hai aur 10% interest milta hai aur 3 saal ke baad maturity hai.
ek saal ke baad man loh price 1200 ho gaya toh aapko 200 rs ka profit hoga plus 10% ka interest milega. ab aap isko market main sell out kar sakte hai maturity se pehle.
NCDs main ek hi diktata hoti hai ki agar company ki halat kharab ho gyi toh interest toh chodo principal milna bhi muskil hota hai. ILF&S ka expample hamare samne hai.
hamesha yaad rakhna Jitna zayada return ncds main hoga utna risky investment hoga.
Thanks mw bhai.. Ye safe he company?? Or agar hua to secured hi he to paise vapis nahi mil sakte??
Please don’t put money in Edelweiss as of now looking at the issues in NBFCs. At this time please stick with a brand name like L&T or Tata. As far as secured NCDs are concerned
“Secured NCDs are the ones which are backed up by some assets which can be liquidated for paying off the debenture holders in case the company issuing the same is not able to redeem them. For this reason, the returns on secured NCDs are lower than unsecured NCDs”
Now if a company is unable to pay back your money it will sell off its asset and pays you back. However, this process is quite cumbersome and finally, you may not get the full amount which you have invested as the valuation of asset at the time of selling will decide the fate.
If a case goes to NCLT for liquidation, the following manner will be used to distribute the money among the creditors.
First Priority= Debt owned to Secured creditors.
Second Priority= financial debts owed to unsecured creditors, preference shareholders & finally equity shareholders or partners, as the case may be.
Subscription figure as on 15.05.2019 2:28 PM
Cat-1(Institutional) = 0x
Cat-2( Corporates) = 0.34x
Cat-3(HNIs ) = 0.4x
Cat-4 ( Retail) = 1.79x
Any Update on Muthoot Finance NCD?
https://listing.bseindia.com/download/9893/IPO/ECL%20Finance%20Limited%20-%20Draft%20Shelf%20Prospectus%20-%20April%2024,%202019_20190424235206.pdf
Please add details/review .. IZ would be the first portal to provide details on this issue.