11% Indiabulls Consumer Finance NCD – Feb’19 – Should you Invest?

Indiabulls Consumer Finance Limited has come out with latest NCD (non-convertible debentures) offering up to 11% interest rate. The issue opens on February 4 and closes on March 4 , 2019.

Indiabulls Consumer Finance Limited (IBCFL),formerly IVL Finance Limited is a non-deposit taking NBFC registered with the Reserve Bank of India and is a 100% subsidiary of Indiabulls Ventures Limited. 

Indiabulls Consumer Finance NCD – Significant Points:

  • Offer Period:  February 4 to March 4, 2019
  • Annual Interest Rates for Retail Investors: 10.4% to 11% depending on tenure
  • Price of each bond: Rs 1,000
  • Minimum Investment: 10 Bonds (Rs 10,000)
  • Max Investment Limit for Retail Investor: Rs 10 Lakhs
  • Credit Rating: CARE AA/Stable, Brickwork AA+/Stable
  • NCD Size: Rs 250 crore with option to retain over-subscription upto Rs 2,750 crore
  • Allotment: First Come First Serve
  • Listing: Bonds would be listed on BSE & NSE and will entail capital gains tax on exit through secondary market

Also ReadKnow NCD – Investment Tips, TDS and Taxation

Indiabulls Consumer Finance NCD – Investment Options:

There are 8 options of investment in Indiabulls Consumer Finance NCD.

Indiabulls Consumer Finance NCD - February 2019 - Investment Options
Indiabulls Consumer Finance NCD – February 2019 – Investment Options

Also Read: 25 Tax Free Incomes & Investments in India

Indiabulls Consumer Finance NCD – Who can Apply?

This issue is open to all Indian residents, HUFs and Institutions.

  • Category I – QIB Investors – 20% of the issue is reserved
  • Category II – Corporate Investors – 30% of the issue is reserved
  • Category III – HNIs Investors – 30% of the issue is reserved
  • Category IV – Retail Individual Investors including HUFs – 30% of the issue is reserved

NRIs cannot apply for this NCD.

Why you should invest?

  1. AA Credit rating means very less likely hood of credit default
  2. The interest rates are 3% higher than your regular Bank FDs
  3. No TDS if invested in Demat Form

Also Read: Highest Interest Rate on Recurring Deposits

Why you should not invest?

  1. There have been issues with some well rated companies like DHFL,
    IL&FS where rating agencies suddenly downgrade the rating. This risk always existed but it has come to forefront in last few months
  2. There are NCDs available in secondary market which have higher yields with similar rating. The problem is low liquidity and hence is difficult to buy in large numbers.
  3. You can also invest in high rated company fixed deposits

How to Apply?

You can apply online by ASBA facility provided by banks. It’s the easiest way to apply and also avoids a lot of hassle in terms of KYC and paper work.

Learn: How to apply for NCD issues using ASBA?

In case you don’t want to do it online, you can download the application form from company site or Financial Institutions and submit to collection centers.

Indiabulls Consumer Finance NCD – Feb 2019
Indiabulls Consumer Finance NCD – Feb 2019

Recommendation:

  1. My recommendation is to invest some part of your Fixed Income investment in this NCD Issue
  2. You should always have diversified portfolio be it fixed deposit, NCD or equity investment
  3. Its good idea to remain invested till maturity because liquidity on exchanges are low and hence you would get lower than market value

If you plan to invest in this issue, do it early as most good NCD issues are over-subscribed before the end date.

 

2 thoughts on “11% Indiabulls Consumer Finance NCD – Feb’19 – Should you Invest?

  1. I have two similar Questions.
    1. What is about the Quality of various NCDs (Non-Convertible Debentures) of SERI Group (SREI INFRA & SREI EQUIPMENT FINANCE)? Why the Price for some of these 10 Yrs NCDs are falling like anything? Face Value of Rs. 1,000/- NCDs are selling at Rs. 820 / Rs. 800 or even lower. Is it advisable to buy 10 Yrs Maturity (say Maturity Date is in 2027 or 2028) NCDs of SERI Group or chances of Default is High?
    2. What about various NCDs (Non-Convertible Debentures) of DHFL? Is it advisable to buy 10 Yrs Maturity (say Maturity Date is in 2028) NCDs of DHFL or chances of Default is Very High?

  2. Hello,
    Thank you for sharing this information.
    Can NRI invest in this?

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