Kosamattam Finance NCD offer - Feb 2015 (Avoid)

Kosamattam Finance, a NBFC primarily engaged in gold loan business, is coming out with its fourth debt offer since April 2014 and has thus joined the list of frequent debt market visiting company. The company is now coming out with its NCD offer for Rs. 200 crore (including greenshoe option of Rs. 100 crore). The issue is opening on 10.02.15 and will close on or before 11.03.15. Post allotment NCDs will be listed on BSE.

Company is issuing Secured and Unsecured Redeemable Non-Convertible Debentures of Rs. 1000 each under seven series and has coupon rates ranging from 11% to 13% and has tenure ranging from 400 days to 70 months and Monthly and Cumulative payment options. Effective yield ranges from 11.75% to 13.80% and thus the offer looks very attractive, but the rating is poor. The company is raising these funds to meet its lending business purpose. Investors can opt for allotment in demat or physical mode, but trading will take place only in demat mode.

Minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and in multiples of 1 NCD thereon, thereafter. Issue is lead managed by Vivro Financial Services Pvt. Ltd. and Karvy Computershare Pvt Ltd is the registrar to the issue. This issue is rated CARE BBB- (Triple B minus) by CARE that indicates instruments with this rating are considered to have a moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk. Company's NPAs have risen tremendously in the current fiscal till November 2014 end to a level of 0.78% from 0.14% (on net basis).


Conclusion / Investment Strategy

On the performance front, the company outperformed in the fiscal 2010-11, 2011-12, 2012-13 and then witnessed fall in its net profit for the fiscal 2013-14 the marked sharp fall in first eight months working. This may prove hard for it to service this debt offer going forward.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Dec 10, 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.

Email: dilip_davda@rediffmail.com

The Kosamattam Finance NCD Feb 2015 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if Kosamattam Finance NCD Feb 2015 worth investing. The Kosamattam Finance NCD Feb 2015 Note sets the NCD expectations in systematic way which tells you if Kosamattam Finance NCD Feb 2015 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Kosamattam Finance NCD Feb 2015 by providing NCD recommendations i.e. subscribe, avoid and neutral.


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