This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at email@example.com
Edelweiss Housing Finance Limited (EHFL), a subsidiary of Rashesh Shah’s Edelweiss Group, is launching its public issue of secured and redeemable non-convertible debentures (NCDs) from tomorrow, July 8th. The issue will carry a maximum of 10% coupon rate with monthly, annual and cumulative interest payment options and tenors of 36 months, 60 months and 120 months.
The issue is scheduled to close on July 27th. However, I think it should get oversubscribed in a day or two due to high demand. Let us check other salient features of this issue.
Size & Objective of the Issue – The company plans to raise Rs. 500 crore from this issue, including the green shoe option of Rs. 250 crore. The company plans to use at least 75% of the issue proceeds for its lending activities and to repay its existing loans and up to 25% of the proceeds for general corporate purposes.
Coupon Rate & Tenor of the Issue – The issue will carry coupon rate of 9.50% p.a. for a period of 36 months (3 years), 9.75% p.a. for 60 months (5 years) and 10% p.a. for 120 months (10 years).
Minimum Investment – Investors need to apply for a minimum of ten bonds in this issue with face value Rs. 1,000 each i.e. a minimum investment of Rs. 10,000.
Categories of Investors & Allocation Ratio – The investors have been classified in the following three categories and each category will have the below mentioned percentage fixed in the allotment:
Category I – Institutional Investors – 20% of the issue i.e. Rs. 100 crore
Category II – Non-Institutional Investors – 20% of the issue i.e. Rs. 100 crore
Category III – Individual & HUF Investors – 60% of the issue i.e. Rs. 300 crore
Allotment will be made on a first-come-first-served basis.
NRIs Not Allowed – Non-Resident Indians (NRIs), foreign nationals and qualified foreign investors (QFIs) among others are not eligible to invest in this issue.
Credit Rating & Nature of NCDs – CARE and ICRA have rated this issue as ‘AA’ with a ‘Stable’ outlook, while Brickwork Ratings has assigned it AA+ (Stable) rating. As mentioned above, these NCDs will be ‘Secured’ in nature.
Listing, Premature Withdrawal & Put/Call Option – These NCDs will get listed on both the national exchanges i.e. Bombay Stock Exchange (BSE) as well as National Stock Exchange (NSE). The listing will take place within 12 working days after the issue gets closed. Though there is no option of a premature redemption, the investors can always sell these bonds on the exchanges.
Demat Not Mandatory – Demat account is not mandatory to invest in these NCDs as the investors have the option to apply for them in physical form as well.
TDS – Though the interest income would be taxable with these bonds, NCDs taken in demat form will not attract any TDS. The investor will have to pay tax on the interest income while filing his/her income tax return.
About EHFL & Its Financials
Note: Figures are in Rs. Crore, except per share data & percentage figures.
Edelweiss Housing Finance Limited (EHFL) is a non deposit taking housing finance company offering financing of various sort to individuals and corporates. Edelweiss Financial Service Limited and Edelweiss Commodity Services Limited are the promoters of EHFL and hold 22.39% and 77.61% stake respectively. EHFL offers home loans – 37% of loan book, loan against property – 26% of loan book, construction finance 20% of loan book and rural finance – 16% of loan book.
Should you invest in these NCDs?
Interest rates of 9.50% to 10% from a private company don’t attract me much. It will take 10 years for these NCDs to provide me approximately 160% return. I would rather invest in good quality stocks than take risk with these kind of NCDs. I think investing in diversified equity mutual funds will generate much higher returns in the long term than these NCDs. Moreover, the interest earned is taxable, which reduces our after-tax returns.
However, these NCDs are still suitable to those investors who are not liable to pay any tax or fall in the 10% tax bracket. Also, I would suggest investors to go for either 36 months option or 60 months option. Investing for a period of 120 months (10 years) with a private company becomes risky sometimes. Risk-averse investors, falling in 20% or 30% tax bracket, should invest in debt funds or tax-free bonds for medium to long term.
Application Form of EHFL Finance NCDs
Note: As per SEBI guidelines, ‘Bidding’ is mandatory before banking the application form, else the application is liable to get rejected. For bidding of your application, any further info or to invest in EHFL NCDs, you can reach us at +919811797407
81 thoughts on “Edelweiss Housing Finance 10% NCDs – July 2016 Issue”
does any one have got credit of ehfl ncd monthly interest credit in account .its suppose to be credited on 1st of every month. still not credited as yet.
I have been a regular reader of your data on NCD’s and found it to be very useful. But first time, I got to read it in details along with comments from persons and great details including Listing Information which I was finding difficult to collate and link with my holdings.
I have found that for most of the NCD issues, the info is available hardly 2-3 days in advance of the Issue. Most of the recent NCD’s get full on first day itself. Hence it is essential to subscribe on the first day itself.
However, 2-3 days period is too small to arrange for money. Even Mutual Fund redemptions get T+2 days. Equity selling is also late.
Is it possible to get information on upcoming NCD’s at least 5 days in advance? That will be great help.
Hello Shiv sir,
What is your view on Dilip build con and S P apparel IPO?
Should one subscribe?
Is it good for long term..or for listing gain?
waiting for your detail view on dhfl ncd shiv
details of dhfl ncd August 2016 and please which option you will select and the most attractive among all options
My cheque for 1 lakh rs was debited on 13/7/2016 but till today no bonds have been alloted nor the refund has come.
Can any one help ?
18003454001 toll free number ask with your detail
There was in a news in Economic times that there two more similar NCD issues to follow. Any idea by whom and when?
I think one is from DHFL and the other one is M&M Finance.
i heard india infoline and srei finance are also coming with NCD.
can you pl share your views on dhfl ncd please
How Much Coupon Rate Expected for 10 years for monthly payment?
EHFL NCDs to get listed on the BSE & the NSE on Friday, July 22nd –
Here are the BSE and the NSE codes for the same:
9.50% 3-year NCDs – Annual Interest – BSE Code – 935778, NSE Code – EHFL9.5
9.50% 3-year NCDs – Cumulative Interest – 935780, NSE Code – EHFL
9.75% 5-year NCDs – Annual Interest – BSE Code – 935782, NSE Code – EHFL9.75
9.75% 5-year NCDs – Cumulative Interest – 935784, NSE Code – EHFLA
9.57% 10-year NCDs – Monthly Interest – BSE Code – 935786, NSE Code – EHFL9.57
10% 10-year NCDs – Annual Interest – 935788, NSE Code – EHFL10
10% 10-year NCDs – Cumulative Interest – BSE Code – 935790, NSE Code – EHFLB
Deemed date of allotment has been fixed as July 19, 2016. Annual interest will be paid on July 19th every year. Monthly interest will be paid on 1st of every month starting October 1st, 2016.
Thanks for informing shiv. Keep on the good work as always.
Thanks Abhinav! 🙂
EHFL ncd 9.57% monthly option is trading at 1011, is it advisable to buy from NSE exchange.
It depends on your requirements Abhinav!
I got a message that certain bonds are alloted. When do I get a refund for the balance money?
You should get your refund soon, probably today itself.
Hi, where do I check the allotment status? I am not able to view it on this link (http://kosmic.karvy.com:81/ipotrack/)
It is yet to get uploaded by Karvy, will be available in a day or two.
Approximately 52% allotment will be made to Category III investors………………….shiv’s prediction bang on……….
applied 101,allotted 53………..received just now.
Please add me and notify me
Can you tell us expected listing price for 10 years monthly interest ncd?
It is difficult to guesstimate the listing price for these NCDs, but I think it should be between Rs. 990 to Rs. 1,010.
any website where i can check my allotment.
Once these NCDs get allotted, you can check the allotment status from this link – http://kosmic.karvy.com:81/ipotrack/
thank u shiv. bonds are allotted and refunds got in bank account. any idea when r they getting listed.
These NCDs should get listed by tomorrow or day after, no official announcement as yet. I’ll share the details once I get any.
18003454001 toll free number for ncd allotment
Thanks Vishal for this no.