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• This is the 10th debt issue from the company since December 2020.
• The last debt offer from the company was in the month of October 2023.
• This issue is rated A+/Stable by CRISIL against AA-/Negative for the last debt issue.
• The company offers same coupon rates with revised rating.
• Well-informed investors may park moderate funds in this issue.
ABOUT COMPANY:
Edelweiss Financial Services Ltd. (EFSL) - erstwhile known as Edelweiss Capital Ltd. commenced its business as an investment banking firm, it diversified through its subsidiaries to include credit including retail and corporate credit, asset management including mutual fund and alternative asset management business, asset reconstruction, insurance both life and general insurance business, and wealth management business.
It has a Pan-India and international network with 238 domestic offices, and 3 international offices (total 241 offices) and employed 6176 employees, and the group comprises 27 subsidiaries as of September 30, 2023.
Edelweiss group today enjoys a strong brand franchise in the financial services space backed by a reputation for consistent focus on execution and innovation. It has sought to carve a distinct brand identity which, help it to increase awareness and consideration amongst customers.
ISSUE DETAILS:
The company is coming out with its 10th NCD issue since December 2020. The company will issue Secured Redeemable NCDs having a face value of Rs. 1000 each for an amount of Rs. 125 cr. with a green shoe option of retaining oversubscription up to Rs. 125 cr., thus making an overall issue size of Rs. 250 cr. The issue opens for subscription on January 09, 2024, and will close on or before January 22, 2024.
For this issue, the merchant bankers are Trust Investment Advisors Pvt. Ltd. and Nuvama Wealth Management Ltd. (erstwhile known as Edelweiss Securities Ltd.) and KFin Technologies Ltd. is the registrar of the issue. Beacon Trusteeship Ltd. is the Debenture Trustee.
The company is spending Rs. 8.58 cr. for this debt offer and from the net proceeds, it will utilize at least 75% for the purpose of repayment/prepayment of existing borrowings with interest, and a maximum of up to 25% for general corporate purposes. A minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and in multiple of 1NCD (i.e. Rs. 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE.
This debt issue carries coupon rates ranging between 8.95% to 10.45% based on the series opted by the investors. It has tenors of 24 months, 36 months, 60 months, and 120 months. The company has allocated 10% for Institutional investors, 10% for Non-institutional investors, 40% for HNIs and 40% for Retail investors.
ISSUE RATINGS:
This issue is rated CRISIL A+/Stable by CRISIL Ratings Ltd., the only rating agency this time. The ratings given by the Credit Rating Agencies are valid as of the date of this Prospectus and shall remain valid until the ratings are revised or withdrawn. The rating is not a recommendation to buy, sell, or hold securities and investors should make their own decision. 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 agency has a right to suspend or withdraw the rating at any time on the basis of factors such as new information. Securities with these ratings indicate adequate degree of safety regarding timely servicing of financial obligations. Such securities carry low credit risk.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, EFSL has posted a total income of Rs. 10954.94 cr. / Rs. 253.92 cr. (FY21), Rs. 7212.59 cr. / Rs. 212.07 cr. (FY22), and Rs. 8632.59 cr. / Rs. 405.56 cr. (FY23). It suffered a setback for FY22 in line with the general trends following the Pandemic.
For H1 of FY24, it earned a net profit of Rs. 172.68 cr. on a total income of Rs. 4160.40 cr.
The asset quality of the overall credit book held by its three credit entities has continued to be under control with Gross NPA at 2.30% and Net NPA at 1.50% as on September 30, 2023. Its Net NPAs stood at 1.36% as of March 31, 2023. Its debt/equity ratio of 3.64 as of September 30, 2023, will increase to 3.69 post this issue. As of September 30, 2023, its total borrowings were Rs. 20191 cr. that raises an alarm. Total AUM stood at Rs. 84500.36 cr. as of the said date.
Review By Dilip Davda on January 5, 2024
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The Edelweiss Financial Services NCD January 2024 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if Edelweiss Financial Services NCD January 2024 worth investing. The Edelweiss Financial Services NCD January 2024 Note sets the NCD expectations in systematic way which tells you if Edelweiss Financial Services NCD January 2024 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Edelweiss Financial Services NCD January 2024 by providing NCD recommendations i.e. subscribe, avoid and neutral.
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