360 One Prime NCD May 24 - Tranche II Issue review - (May apply)

•    This is the 2nd debt offer from the company since January 2024.
•    The company is a financial arm of IIFL group.
•    This offer is rated CRISIL AA/ Stable and ICRA AA/Stable. 
•    The company posted inconsistency in its top and bottom lines for the reported periods. 
•    Investors looking for a steady income may park moderate funds for the medium term.

ABOUT COMPANY:
360 One Prime Ltd. (TOPL) - erstwhile known as IIFL Wealth Prime Ltd. -  is a wholly-owned subsidiary of 360 ONE WAM Limited, operating as a lending vehicle of the 360 ONE group. It is registered as a non-deposit taking non-banking financial company with the Reserve Bank of India under Section 45-IA of the Reserve Bank of India Act ("NBFC") and classified as a middle layer NBFC.

Its products suite primarily includes Loans against Securities (LAS), Loan-against-Property (LAP) and unsecured lending products. The Company provides customized lending solutions including financing against a combination of liquid and illiquid financial assets to meet all funding requirements of clients in form of term loans and advances.

It has a robust and comprehensive credit assessment and risk management framework to identify, monitor and manage risks inherent in its lending operations. Company's credit assessment and risk management framework comprises of a framework, spanning across the (i) screening stage, where its private lending advisors conduct an initial screening of prospective borrowers; (ii) the evaluation stage, where credit team evaluates the prospective borrower's business and financing needs and investigates the prospective borrower's track record, market reputation and ability to repay any loans extended to it.

As of March 31, 2024, its total borrowings (including debt securities (Including derivative component) and subordinated liabilities) were Rs. 6656.54 cr. Its Promoter's branches and touchpoints span 28+ locations across India and five international offices across six geographies with employee strength of more than 1,200 employees as of March 31, 2024. As of March 31, 2024, it had 59 employees. 

ISSUE DETAILS:
The company is coming out with its second debt offer of NCD Tranche-II, May 2024 issue. Its maiden debt offer was in the month of January 2024.The company will be issuing overall 5000000 secured, rated, listed, redeemable, non-i.e. Rs. 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE. The company is spending Rs. 7.22 cr. for this issue and from the net proceeds it will utilize at least 75% for onward lending, financing/refinancing the existing indebtedness and/or repayment/prepayment of interest and principal of existing borrowings, and up to 25% for general corporate purposes. 

This debt offer is jointly lead managed by Trust Investment Advisors Pvt. Ltd., A K Capital Services Ltd., and IIFL Securities Ltd., while Link Intime India Pvt. Ltd. is the registrar to the issue and Beacon Trusteeship Ltd. is the Debenture Trustee. The company has allocated 25% each for Institutions, Non-Institutions, HNIs and Retail categories. 

The company is offering coupon rates ranging from 8.86% to 9.85%, and has tenors of 18 months, 24 months, 36 months, 60 months and 120 months. The interest payment options available is Monthly or Annual as per the selection of the series. 

CREDIT RATINGS:
This debt offer is rated CRISIL AA/Stable by Crisil Ratings Ltd., and ICRA AA/Stable by ICRA Ltd. Securities with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such securities carry very low credit risk. 

In case of any change in credit ratings till the listing of NCDs, the Company will inform the investors through public notices/advertisements in all those newspapers in which pre-issue advertisement has been given. The rating is not a recommendation to buy, sell or hold the rated instrument and investors should take their own decisions. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating.  The rating agencies have a right to suspend or withdraw the rating at any time on the basis of factors such as new information.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, it has posted a total income/net profit of Rs. 754.58 cr. / Rs. 282.80 cr. (FY21), Rs. 671.81 cr. / Rs. 234.52 cr. (FY22), and Rs. 897.21 cr. / Rs. 273.63 cr. (FY23). Thus it posted inconsistency in its top and bottom lines for the reported periods. 

As of March 31, 2024, it had a paid up equity capital of Rs. 305.49 cr. supported by other equity worth Rs. 1133.64 cr. Its debt-equity ratio of 4.63 as of March 31, 2024, will stand enhanced to 4.97 after this issue.