TATA Capital Financial Services Limited NCD 2020
(i) TCFSL, set up in 2010, it is a wholly-owned subsidiary of TCL. Following the change in shareholding structure for the financial business, TCL transferred its lending business along with part of liabilities to TCFSL with effect from March 2012. At the end of Fiscal 2019, the Company’s has a sizeable AUM of 71000 Cr.
(ii) TCFSL is a Systemically Important Non – Deposit-taking Non – Banking Financial Company (“ND – SI – NBFC”) focused on providing a broad suite of financing products customized to cater to the needs of various segments. The financing products include:
a) Corporate finance:
The Corporate Finance Division (“CFD”) offers commercial finance that offers vaNilla term loans, working capital term loans, channel finance, bill discounting, construction equipment finance, leasing solutions, lease rental discounting, promoter finance and structured products.
b) Consumer finance:
The Consumer Finance and Advisory Business Division (“CFABD”) offers a wide range of consumer loans such as car and two-wheeler loans, commercial vehicle loans, tractor loans, business loans, loans against property, personal loans, consumer durable loans and loans against securities.
(iii) They are promoted by and are a wholly-owned subsidiary of TCL, which is a diversified financial services company providing services through its subsidiaries to retail, corporate and institutional clients. TCL is the financial services arm of the Tata group, which is a diversified global business group serving a wide range of customers across varied sectors such as steel, motors, power, chemicals, telecommunications, and hospitality.
Issue Note
Public issue of secured, rated, listed, redeemable, non-convertible debentures of the face value of ₹1,000 each and unsecured, subordinated, rated, listed, redeemable, non-convertible debentures of the face value of ₹1,000 each, for an amount aggregating up to the Shelf Limit of Rs.5000 Crores.
The base size of the Tranche-I issue os Rs. 500 Crores with an option to retain oversubscription up to Rs.1500 Crores, aggregating up to Rs.2000 Crores.I
Objective of NCD TATA Capital Financial Services Limited NCD 2020:
Tata Capital Housing Finance Ltd proposes to utilise the funds towards funding the following objects:
1. For the purpose of onward lending, financing, and for repayment /prepayment of interest and principal of existing borrowings of the company.
2. General Corporate Purposes.
Letter of Offer
TATA Capital Financial Services Limited NCD 2020 Details:
| Open Date: | Jan 07 2020 |
| Close Date: | Jan 08 2020 |
| Issue Size: | ₹ 500 Cr. |
| Face Value: | ₹ 1000 Per NCD |
| Market Lot: | 1 NCD |
| Minimum Order Quantity: | 10 NCD |
| Listing At: | NSE,BSE |
Promoters:
The Promoter is Tata Capital Limited.
Financials:
( Fig. in Crores )
| Year | AUM | Revenue | PAT | Net Worth | FV | Share | Book Value |
| 2016-17 | 51847 | 6324 | 459 | 4210 | 10 | 277 | 15.20 |
| 2017-18 | 61000 | 6784 | 610 | 4798 | 10 | 277 | 17.32 |
| 2018-19 | 77100 | 9205 | 780 | 8117 | 10 | 326.781 | 24.84 |
Credit Rating:
The NCDs proposed to be issued pursuant to this Issue have been rated "CRISIL AAA/Stable" by CRISIL for an amount of up to ₹ 5,00,000 lakh and have been rated "[ICRA] AAA (Stable)" by ICRA for an amount of up to ₹ 5,00,000 lakh.
Conclusion:
The ratings of the NCDs issued by CRISIL and CARE Limited indicate the highest degree of safety regarding timely servicing of financial obligations.
Interest Rates:
| Frequency of Interest Payment | Annual | Monthly | Annual | Monthly | Annual | Annual |
| Type of NCD | Secured | Secured | Secured | Secured | Secured | Unsecured |
| Tenor | 36M | 60M | 60M | 96M | 96M | 120M |
| Coupon rate for I & II | 8.00% | 7.92% | 8.20% | 8.01% | 8.3% | 8.55% |
| Coupon rate for III & IV | 8.10% | 8.10% | 8.30% | 8.10% | 8.40% | 8.70% |
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 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 TATA Capital Financial Services Limited NCD by InvestorZone team => 6/10
1-5: Fair
5-7: Good
7-10: Excellent
[ This is a very good NCD considering a turmoil going on in NBFC market. The company has a strong promoter in the form of Tata Capital Limited which gives confidence in this market. The interest rates are very attractive. It is a first come first serve basis.]
Lead Manager of TATA Capital Financial Services Limited NCD 2020:
- A. K. Capital Services Limited
- Edelweiss Capital Limited
Registrar of TATA Capital Financial Services Limited NCD 2020:
- Kfin Technology Private Limited
Discussion on TATA Capital Financial Services Limited NCD 2020:
8 Comments
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hi, market wizard, I applied on day 1 and it subscribed 3.88x what are my chances of getting full allotment
anyone here applied for this issue, I applied for the first time in any NCD.
waiting for allotment.
How to apply in zerodha
Apply from net banking similar to IPO
What is the allotment process if i apply for 1 lac what are the chances that i will get full allotment
It is first come first serve basis.
Apply if you need something more than FD.
The most important point to look into the secured NCDs is the asset against which these NCDs are secured. We have seen in the case of DHFL, they always secured your NCD against receivables. This means, in case of default, they will pay you from the receivables, which they will receive from the parties whom they have lend money. So if they don’t get receivables in time, your money may go in toss.
In the case of Tata Capital,
” The Secured NCDs would constitute secured obligations of our Company and shall rank pari
passu inter se, present and future and subject to any obligations under applicable statutory and/or
regulatory requirements, shall be secured by way of a first ranking pari passu charge by way of
mortgage over our Company’s specific immovable property and a first ranking pari passu floating
charge over the movable properties of our Company, ”
Here, NCDs are secured over immovable property of Tata Capital. So in case of any default, NCD holders have right on the immovable property.