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India Infoline Jan 2019 Tranche I NCD offer review (Apply)

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•    Flagship Company of IIFL group.
•    This is the third debt offer from it since September 2012.
•    Instrument rated as BWR/AA (stable)CRISIL/AA (Stable) and ICRA/AA (Stable).
•    It is offering three tenures for current offer.

India Infoline Finance Ltd. (IIFL) is a Systemically Important Non-deposit accepting Non-Banking Financial Company ('NBFC-NDSI') registered with the RBI, catering to the credit requirements of a diverse customer base with its plethora of products. Its offerings include mortgage loans, gold loans, commercial vehicle finance, MSME finance, construction and real estate finance, capital market finance, and micro finance; catering to both retail and corporate clients. It is a subsidiary of IIFL Holdings Limited, which is one of India's leading financial services player, primarily engaged in the business of loans and mortgages, wealth and asset management, retail and institutional broking and investment banking.

For the purpose of onward lending and repayment of interest and principal of existing loans (75%) as well as general corpus fund need (25%),

IIFL is coming out with Tranche-I of Secured and/or Unsecured Redeemable Non-Convertible Debentures of Rs. 1000 each for a base size of Rs. 25 crore with a green shoe option to retain oversubscription to the tune of Rs. 175 crore making the total issue size of Rs. 200 crore. The company has an overall shelf limit of Rs. 500 cr.

Issue opens for subscription on 22.01.19 and will close on or before 20.02.19. Minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD (i.e. Rs. 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE and NSE.

This issue is rated as BWR AA/Stable by Brickworks, CRISIL AA/Stable by CRISIL and ICRA AA/Stable by ICRA. This rating indicates that instruments with such ratings are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.  Issue is jointly lead managed by Edelweiss Financial Services Ltd., IIFL Holdings Ltd.,  ICICI Securities Ltd. and Trust Investment Advisors Pvt. Ltd. while Link Intime India Pvt. Ltd. is the registrar to the issue. Catalyst Trusteeship Ltd. is the debenture trustee.

These NCDs have tenures of 39 months, 60 months and 120 months. It offers coupon rates ranging from 9.50% to 10.50% based on selection of investors. Frequency of interest payments will be Monthly, Annually or cumulative as per the choice of investors. This issue has no Put and Call options Allotment will be made on 'first come-first served' basis. Allotment of these NCDs will be in dematerialized mode only. Application is to be made through ASBA mode only.

As on Sept 30, 2018 it had a total of 1755 branches. As on said date, on a consolidated basis, its total AUM stood at Rs. 36737.29 crore, its gross and net NPAs were 2.21% and 1.05% respectively.  For FY18 and H1 of FY19 it has posted net profits of Rs. 5543.01 cr. and Rs. 3572.59 cr. respectively. As on 30.06.18 on standalone basis IIFL's Gross and Net NPAs stood at 3.14% and 1.50% respectively. Post issue its debt-equity ratio will stand increased to 8.94 from 7.68 as on 30.09.18.

Conclusion / Investment Strategy

Investors looking for steady regular income may consider investment for long term in this AA/Stable rated India Infoline NCD issue.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on January 21, 2019

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 prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).

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.


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