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Indiabulls Commercial Credit NCD offer review (Apply)

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•    It’s a maiden debt offer from ICCL.
•    Coupon rates ranging from 8.57% to 9.20%
•    Interest will be paid Monthly/Annually or on Cumulative basis.
•    CARE and CRISIL has given AAA/Stable rating
•    Company’s financial performance is encouraging.

ABOUT COMPANY;
Indiabulls Commercial Credit Ltd. (ICCL) is a 100% subsidiary of Indiabulls Housing Finance Limited (IBHFL) and a non-deposit taking systemically important NBFC registered with RBI and notified under the SARFAESI Act. ICCL focuses primarily on long-term secured mortgage-backed loans. The Company offers loans against property to the target client base of salaried and self-employed individuals and small and medium-sized enterprises. Company also offer mortgage loans to real estate developers in India in the form of lease rental discounting for commercial premises and construction finance for the construction of residential premises. The company had a net-worth of over Rs. 2,000 crores as at 30th June 2018 and had an AUM of Rs. 8,263.6 crs with Gross and Net NPA at 0.60% and 0.40% respectively as at 31st March 2018.

ISSUE DETAILS:
The Company is opening a maiden public issue of Secured Non-Convertible Debentures (NCDs) with a base issue size of Rs. 1,000 cr. with an option to retain oversubscription to the tune of Rs. 1000 cr.  Thus the overall issue size is Rs. 2000 cr. Issue opens on 11th September 2018 and will close on or before 28.09.18. Allotment in the issue is on a first come first serve basis. The NCD issue will have options of 2, 3, 5 and 10 year maturities with an interest rate ranging from 8.57% to 9.20% p.a. Interest payment will be on Monthly, Annual, Cumulative as per the choice of investors. Minimum application to be made is for Rs. 10,000/- (10 NCDs)  and in multiple of Rs. 1000 (1 NCD) thereon, thereafter.  Post allotment these NCDs are proposed to be listed on both BSE and NSE. For listed NCDs there is no TDS applicable when investors subscribe to them in Demat form. Funds mobilized by this issue will be used for onward lending, financing, repayment of interest and principle of certain loans and general corpus fund needs. Post issue, its current debt equity ratio of 5.19 will stand enhanced to 6.79.

LEAD MANAGER / TRUSTEE/REGISTRAR TO THE ISSUE:
Edelweiss Financial Services Limited, A. K. Capital Services Limited, Axis Bank Limited, Trust Investment Advisors Private Limited, YES Bank Limited and Yes Securities (India) Limited are the Lead Managers to the issue. Axis Trustee Services Limited is the Debenture Trustee, while Karvy Computershare Private Limited is the Registrar to the Issue.

FINANCIAL PERFORMANCE:
On performance front, for last four fiscals, ICCL has posted total revenue/net profits of Rs. Rs. 189.61 cr. / Rs. 26.32 cr. (FY15), Rs. 383.85 cr. / Rs. 50.55 cr. (FY16), Rs. 408.60 cr. / Rs. 58.56 cr. (FY17) and Rs. 931.14 cr. / Rs. 254.90 cr. (FY18). Thus it has shown improvements in financial performance on Y-o-Y basis. As on 31.03.18 its paid up equity capital of Rs. 83.07 cr. is supported by reserve and surplus of Rs. 1200 cr. plus.

OFFER RATINGS:
NCDs proposed to be issued carry AAA/Stable rating from CRISIL and CARE. The rating of NCDs by CRISIL indicate that instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations and these instruments carry the lowest credit risk.


Conclusion / Investment Strategy

Considering good rating, impressive financial data, investment for medium to long term may be considered by the investors looking for fixed income.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Sep 8, 2018

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.

Email: dilip_davda@rediffmail.com

The Indiabulls Commercial Credit NCD Sep 2018 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if Indiabulls Commercial Credit NCD Sep 2018 worth investing. The Indiabulls Commercial Credit NCD Sep 2018 Note sets the NCD expectations in systematic way which tells you if Indiabulls Commercial Credit NCD Sep 2018 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Indiabulls Commercial Credit NCD Sep 2018 by providing NCD recommendations i.e. subscribe, avoid and neutral.