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Should you subscribe to JM Financial Products Ltd Secured NCD?

Published on Friday, September 24, 2021 by Chittorgarh.com Team

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Should you subscribe to JM Financial Products Ltd Secured NCD?

The First Tranche of the Non-Convertible Debenture (NCD) issue of JM Financial Products Ltd aggregating to Rs 500 crore has opened for subscription on Thursday, September 23rd, 2021. The four series issue comes with a floating interest rate option on the shorter end of the maturity curve while the company is offering interest rates ranging from 7.91% to 8.30% per annum for the bonds with longer tenure. Here is the lowdown on JM Financial Products NCDs that will help investors like you to take an informed call on investing in the NCD.

JM Financial Products NCD Issue Highlights

Series

I

II

III

IV***

Interest Type

Floating**

Fixed

Fixed

Fixed

Frequency of Interest Payment #

Annual

Annual

Monthly

Annual

Minimum Application

Rs. 10,000 (10 NCDs) across all Series collectively

Face Value/ Issue Price of NCDs (Rs/ NCD)

Rs. 1,000 (1 NCD)

In Multiples of thereafter (Rs)

Rs. 1,000 (1 NCD)

Tenor

39 months

60 months

60 months

100 months

Coupon (% per annum) for all categories of NCD Holders 

91-day T-bill* + 315 bps spread

8.20%

7.91%

8.30%

Effective Yield for all categories of NCD Holders

-

8.19%

8.20%

8.30%

Amount (Rs / NCD) on Maturity for all categories of NCD Holders 

1,000.00

1,000.00

1,000.00

1,000.00

Maturity / Redemption Date (Months from the Deemed Date of Allotment)

39 months

60 months

60 months

100 months

Put and Call Option

Not applicable


Rating

[ICRA] AA/(STABLE) by ICRA and CRISIL AA/STABLE by CRISIL. Such rating indicates high degree of safety regarding timely servicing of financial obligations.


Company Profile

JM Financial is a "Systemically Important Non - Deposit Taking NBFC" (NBFC-ND-SI) registered with the Reserve Bank of India and operates under the "JM Financial" franchise. Incorporated as J.M. Lease

Consultants Private Limited on July 10, 1984, we are focused on offering a broad suite of loan products which are customized to suit the needs of the corporates, institutions, SMEs and individuals. Our

Company broadly operates under the following verticals viz. (i) Bespoke financing; (ii) Real estate financing; (iii) Capital market financing; (iv) Retail mortgage financing; and (v) Financial institution financing.


Objective of the issue

The funds raised through the Tranche I Issue will be used for the purpose of onward lending, financing, and for repayment / prepayment of interest and principal of the borrowings of the Company (at least 75%) and for general corporate purposes (up to 25%).


Conclusion

On the whole, it is safe to invest in JM Financial Products NCD issue given the low interest rate profile of other competing investment options like bank FDs currently available in the market. It also seems to have ticked most of the right boxes like high credit rating, security, attractive interest rates and choice of tenure to match investors' risk profile.


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