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Edelweiss Financial NCD July 24 issue review (May apply)

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•    This is the 12th debt offer from the company since December 2020.
•    The last debt offer was in the month of April 2024. 
•    For this debt offer, it has increased coupon rates.
•    The offer is rated CRISIL A+/Watch negative.
•    Well-informed investors looking for a steady income may park moderate funds for medium term. 

Edelweiss Financial Services Ltd. (EFSL), erstwhile known as Edelweiss Capital Ltd., after commencing the business as an investment banking firm, through its subsidiaries has diversified its businesses to include credit including retail and corporate credit, asset management including mutual fund and alternatives asset management businesses, asset reconstruction, insurance both life and general insurance business. The company believes that its focus on product innovation and a seamless customer experience has helped expand its retail footprint to approximately 7.59 million customers. 

Its research driven approach and consistent ability to capitalize on emerging market trends has further enabled it to foster strong relationships across client segments including corporates, institutions (both domestic and international), high Networth individuals and retail clients. It has a Pan-India and international network with 250 (two hundred and fifty) domestic offices, and 3 (three) international offices (total 253 offices) and employed 6,117 employees as at March 31, 2024.

The company is coming out with its 12th debt offer. This NCD issue is for 2000000 secured, redeemable, non-i.e. Rs. 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE.

The company is spending Rs. 7.39 cr. for this debt issue process, and from the net proceeds, it will utilize at least 75% for the repayment/prepayment of existing borrowings, and maximum up to 25% for general corporate purposes. 

The issue is jointly lead managed by Trust Investment Advisors Pvt. Ltd., and Nuvama Wealth Management Ltd., while KFin Technologies Ltd. is the registrar to the issue and Beacon Trusteeship Ltd. is the debenture trustee to the issue. 

This debt offer has tenors of 24 months, 36 months, 60 months, and 120 months with coupon rates ranging from 9.50% to 11%, and interest payment frequency as Monthly, Annual, as per the the investors. 

The company has allocated 10% for Institutional portion, 10% for Non-institutional portion, 40% for HNI portion and 40% for Retail investors portion.

This debt offer is rated CRISIL A+/watch negative for an amount of Rs. 150 cr. Securities with these ratings are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such securities carry low credit risk. The rating watch reflects an emerging situation, which may affect the credit profile of the rated entity. 

The rating given by the Credit Rating Agency is valid as on the date of this Prospectus and shall remain valid until the rating is revised or withdrawn. The rating is not a recommendation to buy, sell or hold securities and investors should take 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. These rating is not a recommendation to buy, sell or hold securities and Investors should take their own decisions. 

On the financial performance front, for the last two fiscals, the company has (on a consolidated basis) posted a total income/ net profit of Rs. 8632.59 cr. / Rs. 405.56 cr. (FY23), and Rs. 9601.58 cr. / Rs. 528.05 cr. 

Its debt equity ratio as of March 31, 2024 at 3.35 will increase to 3.38 post this debt issue. 

Conclusion / Investment Strategy

This Edelweiss group financial arm has emerged as a frequent visitor to debt markets. Its last debt issue was in April 2024. It has increased the coupon rates for this debt offer with a little downgrade in its credit rating. Well-informed investors looking for steady income may park moderate funds for the medium term.

Review By Dilip Davda on July 4, 2024

Review Author

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, a freelance journalist

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: ).

The Edelweiss Financial Services NCD July 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 July 2024 worth investing. The Edelweiss Financial Services NCD July 2024 Note sets the NCD expectations in systematic way which tells you if Edelweiss Financial Services NCD July 2024 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Edelweiss Financial Services NCD July 2024 by providing NCD recommendations i.e. subscribe, avoid and neutral.


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