ICL Fincorp NCD Nov. 25 issue review - (Not Rated)

•    This is the 7th Debt offer from the company since November 2023.
•    The last debt offer was in the month of July 2025.
•    This debt offer is rated CRISIL BBB - /Stable by CRISIL
•    This offer has coupon rates ranging from 10.5% to 12%.
•    The company marked inconsistency in its bottom lines during the reported periods.
•    Well-informed investors may park moderate funds for medium term.

ABOUT COMPANY:
ICL Fincorp Ltd. (IFL) is a non-deposit taking and a base layer 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, Maharashtra, Goa and West Bengal. 

It also provides loans against property, business loans and personal loans. Its Gold Loan portfolio before impairment allowance (excluding off balance sheet assets) for the quarter ended June 30, 2025, Fiscals 2025, 2024, 2023, amounted to Rs. 687.60 cr., Rs. 639.06 cr., Rs. 465.85 cr. and Rs. 392.94 cr., which is 99.22%, 99.11%, 98.66% and 99.20% of its total loans and advances (excluding off-balance sheet assets) as on such specific dates, on standalone basis. As of September 30, 2025, it had a network of 300 branches, located in the states of Kerala, Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, Odisha, Gujarat, Maharashtra, Goa and West Bengal.

IFL is currently registered with RBI as a non-deposit taking NBFC. 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. It is emphasizing its focus on customer onboarding, loan disbursal, and the creation of an efficient ground management team. The company has invested in technology and processes that enable quick and easy customer onboarding. This includes user-friendly digital interfaces and simplified documentation procedures, ensuring that customers can access its services with minimal effort. As of September 30, 2025, it had 1433 employees on its payroll.

As of June 30, 2025, the company held cash balance of Rs. 3.06 cr. and held gold jewellery of 1.51 tons. As of the said date, its total Rs. 8.69 cr. were involved in internal fraud, spurious gold and theft/burglary matters.

ISSUE DETAILS:
The company is coming out with its maiden debt offer of 1000000 listed, rated, secured, redeemable, non-convertible debentures of face value of Rs. 1000 each, to mobilize over all Rs. 100 cr. The issue consists of Rs. 50 cr. for base size and a green shoe option of retaining oversubscription of Rs. 50 cr. The issue opens for subscription on November 17, 2025, and will close on or before November 28, 2025. The minimum application to be made is for 10 NCDs (Rs. 10000) and in multiple of 1 NCD (Rs. 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE. 

The company has allocated 5% for Institutional investors, 1% for non-institutional investors, 30% for HNIs and 64% for Retail investors. 

This debt offer is solely lead managed by Vivro Financial Services Pvt. Ltd., and Cameo Corporate Services Ltd. is the registrar to the issue. Mitcon Credential Trusteeship Services Ltd. is the debenture trustee.

This debt offer has tenors of 13 months, 24 months, 36 months, 60 months and 70 months depending on the selection of series. It offers coupon rates ranging from 10.50% to 12% with interest payment options of Monthly, Annual and Cumulative. 

The company is spending Rs. 2.41 cr. for this debt issue and from the net proceeds, it will utilize at least 75% for the purpose of onward lending, investment in its various schemes, repayment/prepayment of certain borrowings, and maximum up to 25% for general corporate purposes.

ISSUE RATING:
This debt offer is rated CRISIL BBB -/Stable outlook by CRISIL Ltd. Instruments with this rating are considered to have moderate degree of safety regarding timely servicing of financial obligations and such securities carry moderate credit risk. The rating issued by CRISIL is live until withdrawn or changed and as available on CRISIL’s website. 

The rating provided by the Credit Rating Agency 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. 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 or electronic modes such as online newspapers or website of the Issuer or the stock exchanges in which pre-issue advertisement has been given.

FINANCIAL PERFORMANCE:
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. 112.64 cr. / Rs. 3.04 cr. (FY23), Rs. 145.69 cr. / Rs. 0.08 cr. (FY24), Rs. 191.69 cr. / Rs. 2.44 cr. (FY25).  For Q1 of FY26 ended on June 30, 2025, it earned a net profit of Rs. 2.13 cr. on a total income of Rs. 47.21 cr. Thus, though it marked growth in its top lines for the reported periods till FY25, it posted declined net profits for FY24. 

Its pre-issue debt equity ratio of 6.22, as of June 30, 2025, will stand enhanced to 7.12 post this issue.