IIFL Home Finance NCD issue is not for risk averse investors

Installment II issue comprises of base issue size of 100 crore with the option to maintain oversubscription up to Rs. 900 crores in total 1,000 crores. The NCD issue will remain open for subscription till December 28, with the option of early closure or extension.

Secured issue by a wholly owned subsidiary of IIFL Finance Ltd. is rated AA with Stable outlook by CRISIL Ratings Ltd and AA+ with negative outlook by Brickwork Ratings India Pvt Ltd. The face value of the issue is 1,000 each and the minimum application size is 10,000.

There are eight series of NCDs available with a fixed coupon and having tenors of 36 months, 60 months and 84 months with yearly, monthly and cumulative payment options. The NCDs are proposed to be listed on BSE and NSE.

The net proceeds of the issue will be used for further lending, financing, and repayment or prepayment of principal and interest on the Company’s existing borrowings (at a minimum of 75%) – and the remainder (up to a maximum of 25%) for general corporate Objective.

Harshad Chetanwala, SEBI-registered investment advisor and co-founder, MyWealthGrowth.com, said, “Although the interest rate remains low, investors who are willing to take additional risk can look at it for regular income given the attractive rate . Return to the present scenario.”

However, the additional return on any investment comes with additional risk. “Hence, investors with medium to high risk may prefer to look at this NCD. It may not be suitable for risk-averse investors who prefer low or limited risk. They can consider investing in fixed income through debt mutual funds as the investment is diversified across different companies and instruments rather than just one company or one instrument.”