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• IFL is primarily is a gold loan company with major operations in southern states.
• This is the 2nd debt offer from the company since November 2023.
• It has posted an average financial performance so far.
• It is offering a lucrative coupon rates, but has a poor BBB-/Stable rating from ACUITE.
• Well-informed investors may park moderate funds for medium term.
• The company has allocated 68% of the issue for the retail investors.
ABOUT COMPANY:
ICL Fincorp Ltd. (IFL) is a non-deposit taking and a systemically important non-banking finance company ("NBFC") in the gold loan sector lending money against the pledge of household gold jewellery ("Gold Loans") in the states of Kerala, Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, Odisha, Gujarat and Maharashtra. It also provides loans against property, business loans and personal loans.
As on December 31, 2023, it had a network of 277 branches with major presence in the southern states including Kerala, Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, Odisha, Gujarat and Maharashtra. The Company specializes in providing Gold Loans to individuals, primarily from middle-class families. Its Gold Loan business is built on the foundation of customer-centricity, efficiency, and with commitment to deliver seamless financial services.
The company offers a wide range of Gold Loan schemes and interest payment options to cater to the unique financial needs of valued customers. Its commitment to flexibility, affordability, and customer satisfaction sets IFL apart in the industry. The company offers varying LTV ratios, subject to statutory limit, based on the fund requirement and interest paying capacity of the customer, so that they can limit the loan amounts and balance cost of gold loans accordingly. Customers can choose from a wide range of loan tenure options based on their repayment capacity and financial requirements. IFL provides competitive interest rates, and customers can opt various interest rates depending on their preference and risk appetite. Interest-Only Repayment scheme allows customers to pay only the interest amount throughout the loan tenure, with the principal amount due at the end of the loan term. Structured repayment schemes offer customers the convenience of repaying the loan in regular monthly instalments comprising both principal and interest. EMI schemes provide predictability in loan repayments, making budgeting easier for customers.
The company offers special schemes with shorter tenures for customers who require quick financing with the intent to repay within a limited period. Customers with long term financial objectives can opt for schemes that provide extended repayment tenures. It has specific schemes that offer higher LTV ratios, allowing customers to avail higher loan amounts.
ISSUE DETAILS:
The company is coming out with its 2nd debt offer. The company is offering 750000 Secured, Redeemable, Non-Convertible Debentures having a face value of Rs. 1000 each. The size of the issue is Rs. 75 cr. The issue opens for subscription on April 05, 2024, and will close on or before April 23, 2024. Post allotment, NCDs will be listed on BSE.
IFL is spending Rs. 1.54 cr. for this NCD issue and from the net proceeds, it will utilize at least 75% for onward lending, financing and for repayment of certain borrowings, and maximum up to 25% for general corporate purposes.
The issue is solely lead managed by Saffron Capital Advisors Pvt. Ltd., while Cameo Corporate Services. Ltd. is the registrar of the issue. Mitcon Credentia Trusteeship Services Ltd., is the Debenture Trustee for the issue.
The minimum application to be made is for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD (i.e. Rs. 1000) thereon, thereafter. The interest payment frequency will be Monthly, Cumulative, or Annual as per the 11.00% to 12.50%, and has a tenors of 13 months, 24 months, 36 months, 60 months, and 68 months. The company has allocated 1% for Institutional Investors, 1% for Non-Institutional Investors, 30% for HNIs and 68% for Retail investors.
CREDIT RATING:
The issue is rated as ACUITE BBB-/Stable by ACUITE Ratings and Research Ltd. The rating given by Acuité is valid as on the date of this Prospectus and shall remain valid on date of the issue and allotment of NCDs and the listing of the NCDs on BSE. The ratings provided by Acuité may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. These ratings are not a recommendation to buy, sell or hold securities and Investors should take their own decisions.
FINANCIAL PERFORMANCE:
On the financial performance front, IFL has (on a consolidated basis) posted a total income/net profit of Rs. 76.35 cr. / Rs. 2.80 cr. (FY21), Rs. 89.43 cr. / Rs. 2.71 cr. (FY22), Rs. 112.64 cr. / Rs. 3.04 cr. (FY23). For 3Qs of FY24 ended on December 31, 2023, it earned a net profit of Rs. 2.54 cr. on a total income of Rs. 110.14 cr.
Its net NPA stood at 1.00% for 3Qs-FY24, against 3.53% for FY23. Its debt equity ratio of 5.04 as of December 31, 2023, will stand enhanced to 5.84 post this NCD issue.
Review By Dilip Davda on April 2, 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 ICL Fincorp Limited NCD April 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 ICL Fincorp Limited NCD April 2024 worth investing. The ICL Fincorp Limited NCD April 2024 Note sets the NCD expectations in systematic way which tells you if ICL Fincorp Limited NCD April 2024 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in ICL Fincorp Limited NCD April 2024 by providing NCD recommendations i.e. subscribe, avoid and neutral.
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