JM Financial Credit Solutions NCD: Even as the stock markets remain volatile, JM Financial NCDs which offer an attractive return may be a lucrative investment for earning regular income. Notably, JM Financial’s offer comes closing on the heels of the Rs 12,000 crore NCD issue of DHFL, which received subscriptions worth of Rs 10,000 crore on the very first day. JM Financial Credit Solutions’ NCD to raise up to Rs 750 crore opens today. Even as investors may be mulling whether to subscribe to the issue, bring to you five key things to know about the issue.
Up to 9.75% return
JM Financial issue has six different series on offer, including one with a cumulative interest payout, with each offering a slightly different return. Notably, the 10-year NCDs offer the highest coupon rate of 9.75% per annum. The issue comes with an option of various structures in which the bond will carry tenor ranging from 38 months to 120 months, offering coupon rate between 9.11-9.75 percent.
JM Financial Credit Solutions’s NCD opens for public on 28th May 2018. The issue is scheduled to close on June 20, 2018 with an option of early closure or extension as decided by the Board of Directors of the company or the NCD Public Issue Committee, according to the company’s prospectus.
Minimum investment and Rating
Notably, the minimum investment is pegged at Rs 10,000. Investors will need to have a demat account in order to invest into these NCDs. The NCDs have been rated AA Stable and IND AA Stable; for an amount up to Rs 2,000 crore by Icra and India Ratings. Crisil expects NBFCs assets to grow by 20% to 25% CAGR from FY17 to FY22.
First NCD from the group
“JM Financial Credit Solutions’ Public Issue of NCDs has the distinction of being the first from JM Financial group, an established financial services group with a recognized and trusted brand. Our Company has a track record of stable and sustainable financial performance reflected in our consistent growth in revenues and profitability coupled with a conservative debt equity ratio and strong asset quality,” Shaswat Belapurkar, CEO at JM Financial Credit Solutions said.
Proceeds from the issue
At least 75 percent of the net proceeds of the public issue of NCDs will be used for the purpose of onward lending, financing, and for repayment/ prepayment of interest and principal of existing borrowings of the company, said the firm. Further, a maximum of up to 25 percent will be used for general corporate purposes.