IIFL offers 10% yield on NCDs
IIFL Finance, one of India’s largest non-banking financial companies, will open a public issue of bonds on March 03, 2021. It aims to raise Rs 1,000 crores, for the purpose of business growth and capital augmentation. The bonds offer up to 10.03 per cent yield.
NBFCs to face asset quality, liquidity risk due to Covid 2.0
Hyderabad: IIFL Finance, one of India's largest non-banking financial companies, will open a public issue of bonds on March 03, 2021. It aims to raise Rs 1,000 crores, for the purpose of business growth and capital augmentation. The bonds offer up to 10.03 per cent yield.
The Fairfax and CDC Group backed IIFL Finance will issue unsecured redeemable non-convertible debentures (NCDs), with a base of Rs 100 crore, and a green-shoe option to retain over-subscription up to Rs 900 crore (aggregating to a total of Rs 1,000 crore).
The IIFL bonds offer highest yield of 10.03 per cent per annum for tenor of 87 months. The NCD is available in various options like monthly, annual and at maturity.
In the current scenario, the rate of interest offered by IIFL Finance bonds is very attractive compared with other debt products. Liquid funds offer average net yields of 2.8 per cent-3 per cent, ultra-short-term funds offer average net yields of around 3-3.5 per cent., short-term funds offer average net yield is around 4 per cent-4.25 per cent, while banks are currently offering an interest of around 5.1 per cent for a 3 year fixed deposit. These 10.03 per cent rates will be locked in for 87 months. This is a big advantage as liquidity eases post Covid world for next few years, most experts believe that interest rates can head down and to lock-in good interest rate is a big advantage. Today the interest rates on 10-year government securities are 6 per cent. The credit rating has been AA by Crisil and AA+ by Brickwork. Through the crisis, credit rating of IIFL Finance has been reaffirmed by agencies, which indicates that the instruments are considered to have a high degree of safety for timely servicing of financial obligations and carry very low credit risk. RajeshRajak, CFO, IIFL Finance said, "Through a strong physical presence of 2500 branches across India and a well-diversified retail portfolio, IIFL Finance caters to the credit need of underserved population. The funds raised will be used to meet credit need of more such customers and accelerate our digital process transformation to enable a frictionless experience."
"IIFL has an impeccable track record of more than 25 years and all the bond issues and the debt obligations have always been paid on time," he added.
