IIFL Finance NCD January 2023
IIFL Finance Ltd is a diversified NBFC in India engaged in the business of loans and mortgages along with its subsidiaries. It offers a wide spectrum of products such as Home loan, Gold loan, business loan, microfinance, capital market finance and developer & construction finance, etc.
Presently, Home loans account for ~34% of the loan book, followed by Gold loans (31%), business loans (16%), microfinance (10%), construction & real estate (CRE) loans (7%) and capital market finance (2%). It has significantly reduced its exposure in business loans and CRE loans and has increased exposure towards home and gold loans in the last 6-7 years.
The customers of the company include both retail and corporate clients. The total revenue of IIFL Finance Limited for fiscal 2022, 2021, and 2020 were Rs. 70,062.79 million, Rs. 59,896.89 million, and Rs. 49,261.25 million, respectively.
The Government is encouraging banks to use the co-origination model of financing to address the needs of the Micro, Small and Medium Enterprises (MSME) in the country, especially in smaller towns. The Reserve Bank of India (RBI) revised the co-lending scheme to provide greater operational flexibility to lenders with an aim to improve credit flow to the unserved and underserved sector of the economy.
This helps flow of credit at a lower cost to a wider market. The Reserve Bank of India’s (RBI)’s decision to enable banks and NBFCs (including HFCs) to co-lend is crucial to the progress of NBFCs in India.
Objective of NCD IIFL Finance NCD January 2023:
Public Issue by the Company of secured redeemable non-convertible debentures of face value of ₹ 1,000 each (“NCDs”) for an amount aggregating up to ₹ 5000 Cr (“Shelf Limit”).
(i) For the purpose of onward lending, financing, refinancing the existing indebtedness of IIFL Finance Limited (payment of the interest and/or repayment /prepayment of principal of borrowings) (At least 75%)
(ii) General Corporate Purposes (Maximum of up to 25%)
Letter of Offer
IIFL Finance NCD January 2023 Details:
| Open Date: | Jan 06 2023 |
| Close Date: | Jan 10 2023 |
| Issue Size: | ₹ 100 Cr. |
| Market Lot: | 10 NCD |
| Minimum Order Quantity: | 10 NCD |
| Listing At: | NSE,BSE |
Promoters:
(i) Mr. Nirmal Jain (Managing Director)
Mr. Nirmal Jain is the founder and Managing Director of the Company. He holds a PGDM (Post Graduate Diploma in Management) from the Indian Institute of Management (IIM), Ahmedabad and is a rank holder Chartered Accountant and a Cost Accountant. He started his career in 1989 with Hindustan Unilever Limited. He founded IIFL Group in 1995. It started as an independent equity research Company in India. Over the last 26 years, he has led the expansion of the group, while remaining focused on financial services.
(ii) Mr. R Venkataraman (Joint Managing Director)
Mr. R Venkataraman is the Co-Promoter and Joint Managing Director of the Company. He holds Post Graduate Diploma in Management from Indian Institute of Management (IIM), Bangalore and Bachelor in Electronics and Electrical Communications Engineering from IIT Kharagpur. He joined the Company’s Board in July 1999. He has been contributing immensely in the establishment of various businesses and spearheading key initiatives of the group over the past 23 years.
Financials:
Consolidated Figures in Rs. Crores
| Series 1 | Series 2 | Series 3 | Series 4 | Series 5 | Series 6 | Series 7 | |
| Frequency of Interest Payment | Annual | Cummulative | Annual | Cummulative | Monthly | Annual | Cummulative |
| Nature | Secured | ||||||
| Tenor | 24 Months | 24 Months | 36 Months | 36 Months | 60 Months | 60 Months | 60 Months |
| Coupon Rate ( Retail ) | 8.50% | NA% | 8.75% | NA% | 8.65% | 9% | NA% |
| Effective Yield (% per Annum) | 8.49% | 8.50% | 8.74% | 8.75% | 9% | 8.99% | 9% |
| Amount on Maturity | Rs 1,000 | Rs 1,177.50 | Rs 1,000 | Rs 1,286.45 | Rs 1,000 | Rs 1,227 | Rs 1,539 |
Credit Rating:
The NCDs proposed to be issued under this Issue have been rated CRISIL AA/Stable by CRISIL Ratings Limited and ICRA AA (stable) by ICRA Limited. Such ratings indicated that the instruments are considered to have a high degree of safety regarding timely servicing of financial obligations and carry very low credit risk.
Interest Rates:
| Series 1 | Series 2 | Series 3 | Series 4 | Series 5 | Series 6 | Series 7 | |
| Frequency of Interest Payment | Annual | Cummulative | Annual | Cummulative | Monthly | Annual | Cummulative |
| Nature | Secured | Secured | Secured | Secured | Secured | Secured | Secured |
| Tenor | 24 Months | 24 Months | 36 Months | 36 Months | 60 Months | 60 Months | 60 Months |
| Coupon Rate ( Retail ) | 8.50% | NA% | 8.75% | NA% | 8.65% | 9% | NA% |
| Effective Yield (% per Annum) | 8.49% | 8.50% | 8.74% | 8.75% | 9% | 8.99% | 9% |
| Amount on Maturity | Rs 1,000 | Rs 1,177.50 | Rs 1,000 | Rs 1,286.45 | Rs 1,000 | Rs 1,227 | Rs 1,539 |
Post Tax returns:
(i) Sold after Maturity The interest earned through NCDs will be added to the total income and will be taxed depending upon the income slab of an Individual.
(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 IIFL NCD 2023 Tranche 1 by InvestorZone team => 6/10
1-5: Fair
5-7: Good
7-10: Excellent
Lead Manager of IIFL Finance NCD January 2023:
- Equirus Capital Private Limited
Registrar of IIFL Finance NCD January 2023:
- Link Intime India Private Limited
Discussion on IIFL Finance NCD January 2023:
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IIFL NCD subscription status
non institutional 2.69x
HNI 1.96x
Retail 3.31x
Total Subscription 2.38x
IIFL Finance Bid Details on NSE – https://www1.nseindia.com/products/content/equities/ipos/debt_ipo_current_iifls1.htm