Nido Home Finance June 25 NCD Issue review - (May apply)

•    This is the 8th debt offer from the company since July 2016. 
•    The last debt issue was in the month of March 2025.
•    It has reduced the coupon rates for this debt offer.
•    Though its top line grew, its bottom line posted de-growth for FY25.
•    Well-informed investors looking for a steady income may park moderate funds for the medium to long term.

ABOUT COMPANY:
Nido Home Finance Ltd. (NHFL) (erstwhile known as Edelweiss Housing Finance Ltd.) is a non-deposit taking housing finance company focusing on offering secured loan products to suit the needs of the individuals, including small ticket loans to customers in the affordable housing category. It is a part of Edelweiss group which is one leading diversified financial services groups in India. Its products include home loans, non-housing loans including loan against property, and construction finance. 

It launched credit business around 14 years ago with retail credit products and has diversified its credit
portfolio since then by adding other products. While the home loan portfolio constitutes the largest part of credit book, it seeks to diversify credit risk and ensure that no individual credit product contributes a large portion to overall credit book subject to the conditions stipulated in the HFC license. At the same time, home loans are generally considered less risky based on their historical performance across lenders.

As of March 31, 2025 it had 67 offices in 67 cities in India. Over the past several years, it has diversified and expanded its presence into markets that are of greater relevance to the products it offers. NHFL’s offices aim at providing quick and seamless customer experience with emphasis on a single window interface for the customer. Its Branch Operations has significant technology architecture to ensure industry leading customer experience. Its operations are supported by 702 employees as of March 31, 2025.

ISSUE DETAILS:
The company is coming out with its 8th debt offer of 1500000 secured, redeemable, non-convertible debentures of face value of Rs. 1000 each to mobilize Rs. 150 cr. The issue consists of base size of Rs. 75 cr. and has green shoe option to retain oversubscription of Rs. 75 cr. The issue opens for subscription on June 17, 2025, and will close on or before June 30, 2025. The minimum application to be made is 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. The company is spending Rs. 4.98 cr. for this debt offer and from the net proceeds, it will utilize at least 75% for onward lending, financing and for repayment/prepayment of existing borrowings with interest, and maximum up to 25% for general corporate purposes.

This debt offer is jointly lead managed by Tipsons Consultancy Services Pvt. Ltd., Nuvama Wealth Management Ltd. (erstwhile Edelweiss Securities Ltd.), while KFin Technologies Ltd. is the registrar to the issue. Beacon Trusteeship Ltd. is the debenture Trustee. 

The company is offering coupon rates ranging from 9.25% to 10.75% with a monthly/annual/cumulative interest payment option. It has reduced the coupon rates for this debt issue. This debt issue has tenor of 24 months, 36 months, 60 months and 120 months. The company has allocated 10% for Institutional Investors, 10% for Non-Institutional Investors, 40% for HNIs and 40% for Retail investors. 

CREDIT RATINGS:
This debt issue is rated CRISIL A+ / Stable by CRISIL Ratings Ltd. Securities with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such securities carry low credit risk. The rating watch reflects an emerging situation, which may affect the credit profile of the rated entity. The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating given by CRISIL Ratings Limited is valid as on the date of this Prospectus and shall remain valid until the ratings are revised or withdrawn. 

The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The rating agency has a right to suspend or withdraw the rating at any time on the basis of factors such as new information. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has posted a total income/net profit of Rs. 444.69 cr. / Rs. 16.06 cr. (FY23), and Rs. 464.84 cr. / Rs. 19.31 cr. (FY24), and Rs. 520.63 cr. / Rs. 18.63 cr. (FY25). Though its top line marked growth for FY25, its bottom line declined and that raises concern.

Its debt equity ratio as of March 31, 2025 at 3.79 will stand enhanced to 3.97 post this issue. As of the said date, its net NPAs stood at 2.17. Increase in its net NPA raise alarm.