Indiabulls Housing Fin Tranche V NCD review (May apply)

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•    This is the 8th debt offer from IBHFL since September 2016.
•    Its last debt offer was in the month of December 2022.
•    This offer comes with a bit higher coupon rates for retail investors with maintained ratings. 
•    Investors looking for a regular income may consider investment for the medium to long term.

Indiabulls Housing Finance Ltd. (IBHFL) is one of the largest housing finance companies ("HFCs") in India in terms of AUM. IBHFL focuses primarily on long-term secured mortgage-backed loans and as of the date of this Shelf Prospectus, the majority of its loan book comprises secured loans. The company primarily offers housing loans and loans against property to the target client base of salaried and self-employed individuals and micro, small and medium-sized enterprises ("MSMEs").

It also offers 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. A majority of its assets under management ("AUM") comprise housing loans, including in the affordable housing segment, as defined by the RBI. The company has shifted to an asset-light business model, focusing on the co-lending of loans along with banks, other financial institutions, and credit funds and an increased sell-down of its loan portfolio.

As of March 31, 2022, housing loans and non-housing loans constituted 62% and 38%, respectively of Loan Book. As on March 31, 2022, Loan Book was Rs. 61,589.26 crores and as on December 31, 2022, it was Rs. 53,922.14 crores, on a consolidated basis.

As of December 31, 2022, it had a network of 203 branches spread across India which gives it a pan-India presence and allows it to interact with and service customers. As of December 31, 2022, it had a direct sales team of 2,288 employees across its network. This sales team is instrumental in sourcing the majority of customers. The company also rely on external channels, such as direct sales agents for referring potential customers. In addition, it has an online home loan fulfilment platform called e-Home Loans which allows customers to apply for a home loan and upload the requisite documents online.

As of December 31, 2022, its consolidated borrowings (other than debt securities) were Rs. 28,433.74 crores, consolidated debt securities were Rs. 18,944.55 crores and consolidated subordinated liabilities were Rs. 4,497.87 crores.

IBHFL is coming out with its 8th debt offer in a short span. Its last offer was in the month of December 2022. The company is coming out with its offer of Secured, Redeemable Non-Convertible Debentures of the face value of Rs. 1000 each together amounting to Rs. 100 cr. as the base size. It has a green shoe option to retain oversubscription to the tune of Rs. 900 cr., thus making an overall issue size of Rs. 1000 cr. under Tranche V, (It has a shelf limit of Rs. 1400 cr.). Minimum application is to be made for 10 NCDs (i.e., Rs. 10000) and in multiples of 1 NCD (i.e., Rs. 1000) thereon, thereafter. The issue opens for subscription on March 03, 2023, and will close on or before March 17, 2023. Post allotment, NCDs will be listed on BSE and NSE. 

The company will utilize at least 75% of the net proceeds for the purpose of onward lending, financing, and repayment of interest and principal of existing borrowings and up to 25% for general corporate purposes. The company will be spending Rs. 22.50 cr. for this Rs. 1000 cr. debt offer.

This debt issue is jointly lead managed by Edelweiss Financial Services Ltd., A K Capital Markets Ltd., IIFL Securities Ltd., and Trust Investment Advisors Pvt. Ltd. while KFin Technologies Pvt. Ltd. is the registrar to the issue and IDBI Trusteeship Services Ltd. is the Debenture Trustee.

This debt offering is rated as CRISIL AA/Stable by CRISIL and ICRA AA/Stable by ICRA Ltd. The rating of NCDs by Brickworks indicates that instruments with this rating are considered to have a high degree of safety regarding the timely servicing of financial obligations and such instruments carry low credit risk.

This debt offer has coupon rates ranging from 8.88 % to 10.15 %. It has tenures of 24 months, 36 months, and 60 months. Series have Annual, Monthly or Cumulative interest payment options. IBHFL is offering an additional 0.25% incentive to existing bondholders of group companies and shareholders of IBHFL. It has allocated 30% for Institutional investors, 10% for non-Institutional investors, 30% for HNIs, and 30% for retail investors. Allotment will be compulsorily in Demat mode only and on the basis of "First come, first served".

For the last three Fiscal Years, its consolidated total revenue/net profits from operations were Rs. 13223.23 cr. / Rs. 2165.92 cr. (FY20), Rs. 10030.12 cr. / Rs. 1201.59 cr.  (FY21) and Rs. 8993.90 cr. / Rs. 1177.74 cr. (FY22). For 3Qs of FY23 ended on December 31, 2022, it earned a net profit of Rs. 867.08 cr. on total revenue of Rs. 6648.66.

As of December 31, 2022, March 31, 2022, 2021 and 2020, its consolidated gross NPAs as a percentage of its consolidated Loan Book were 4.27%, 3.76%, 3.16% and 2.32%, respectively, and Its debt-equity ratio of 3.00 as of December 31, 2022, will increase to 3.06 post this debt issue. As of the same date, its existing paid-up capital of Rs. 89.72 cr. is supported by free reserves worth Rs. 17452.03 cr. 

Conclusion / Investment Strategy

This is the 8th debt offer from this company since September 2016. For this debt offering, the company has hiked its coupon rates for the retail category a bit while maintaining its rating. Investors looking for regular income may park moderate funds for a medium to long term.

Review By Dilip Davda on Mar 2, 2023

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: dilip_davda@rediffmail.com ).

The Indiabulls Housing Finance Tranche V NCD Mar 2023 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 Housing Finance Tranche V NCD Mar 2023 worth investing. The Indiabulls Housing Finance Tranche V NCD Mar 2023 Note sets the NCD expectations in systematic way which tells you if Indiabulls Housing Finance Tranche V NCD Mar 2023 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Indiabulls Housing Finance Tranche V NCD Mar 2023 by providing NCD recommendations i.e. subscribe, avoid and neutral.


1. Kamal Garg     Link|Mar 5, 2023 12:56:31 PM
How can one avail the additional 0.25% interest rate incentive in case of existing bondholders. Because the application form does not capture this information. Is it a marketing gimmick because if the application form does not capture this information, then, this eligibility will not be processed.