IIFL Finance Ltd. Live Bond/NCDs Subscription Status

IIFL Finance Ltd. Bond/NCDs (1000 Crore) which opened on 3 March 2021 (with early close option) was 2.62 times subscribed overall and 4.08 times subscribed in retail segment (category IV) updated as on 5 March 2021 at 17:00 PM. The issue will close on 23 March 2021. It has got a massive response specially from reail investors.

IIFL Finance Ltd is raising up to Rs 1,000 crore through a non-convertible debenture (NCD) issue offering up to 10.03% yield. The issue is part of the company’s fundraising plan, under which it aims to raise up to Rs 5,000 crore. The issue will open on Wednesday (March 3, 2021). The base issue is of Rs 100 crore with a greenshoe option to retain oversubscription of up to Rs 900 crore.

The bonds offer up to 10.03% yield for a tenor of 87 months and the issue has been rated AA with negative outlook by Crisil Ltd and AA+ with negative outlook by Brickwork Ratings.

 Source: https://www1.nseindia.com/products/content/equities/ipos/debt_ipo_current_iiflu1.htm

MTAR TECHNOLOGIES LTD IPO

Incorporated in 1999, MTAR Technologies is a leading national player in the precision engineering industry. The company is primarily engaged in the manufacturing of mission-critical precision components with close tolerance and in critical assemblies through its precision machining, assembly, specialized fabrication, testing, and quality control processes.

Since its inception, MTAR Technologies has significantly expanded its product portfolio including critical assemblies i.e. Liquid propulsion engines to GSLV Mark III, Base Shroud Assembly & Airframes for Agni Programs, Actuators for LCA, power units for fuel cells, Fuel machining head, Bridge & Column, Drive Mechanisms, Thimble Package, etc. A wide range of complex product portfolios meets the varied requirements of the Indian nuclear, Defence, and Space sector. ISRO, NPCIL, DRDO, Bloom Energy, Rafael, Elbit, etc. are some of the esteem clients.

Currently, the firm has 7 state-of-the-art manufacturing facilities in Hyderabad, Telangana that undertake precision machining, assembly, specialized fabrication, brazing and heat treatment, testing and quality control, and other specialized processes.

Objective of the Offer:                                                       

To meet business working capital requirements.

To meet general corporate purposes.      

To meet public issue expenses.   

MTAR Technologies IPO Details

IPO Opening Date	Mar 3, 2021
IPO Closing Date	Mar 5, 2021
Issue Type	Book Built Issue IPO
Face Value	₹10 per equity share
IPO Price	₹574 to ₹575 per equity share
Market Lot	26 Shares
Min Order Quantity	26 Shares
Listing At	BSE, NSE
Issue Size	10,372,419 Eq Shares of ₹10 (aggregating up to ₹596.41 Cr)
Fresh Issue	2,148,149 Eq Shares of ₹10 (aggregating up to ₹123.52 Cr)
Offer for Sale	8,224,270 Eq Shares of ₹10 (aggregating up to ₹472.90 Cr)

 Tentative Timetable

IPO Open Date	Mar 3, 2021
IPO Close Date	Mar 5, 2021
Basis of Allotment Date	Mar 10, 2021
Initiation of Refunds	Mar 12, 2021
Credit of Shares to Demat Account	Mar 15, 2021
IPO Listing Date	Mar 16, 2021

SEBI - New Rules for Peak Margin in Intraday Trading (Phase 2 Effective from 1, March, 2021)

Peak Margin is the minimum margin that MUST be collected by brokers from their clients in advance of placing any intraday / delivery order in the Cash and derivatives segment. This aims to curb the excessive leverage for intraday and derivatives positions. Clearing corporations will randomly take 4 snapshots at predefined time windows for arriving at such peak margin requirements on open positions during the day. Highest of the margin requirement from these 4 snapshots will be the Peak Margin. 

Daily peak margin obligation of the client will be compared with his/her margin available with the broker and the higher shortfall in collection of margin obligation shall be considered for levying of penalty as per the extant framework, as per SEBI's circular. 

Who is liable to pay the penalty on the peak margin shortfall? Broker is liable for both reporting the shortfall in collection of peak margin and pay penalty on such shortfall. The penalty is in range of 0.5% to 5% of the shortfall amount on a daily basis.

In the second phase of peak margin brokers need to collect 50% margin from their customers. In short, if a trader needs to take up a position of Rs 1 lac, he will need to deposit Rs 50 thousand as margin with his broker. Till last week, the trader had to deposit 25 percent of the trade value as margin.

From December 1, 2020, SEBI introduced the concept of peak margin reporting, in which stockbrokers have to calculate margins based on the intraday peak position, not just the end-of-the-day positions. To arrive at an intraday peak position margin, clearing corporations have to take at least four snapshots randomly during the day.

SEBI has now mandated all the brokers to report the margins multiple times during the day. This is to ensure that all leveraged trades are backed by sufficient margins.

The number of times the brokers need to send the margins in a day (at least four snapshots) is decided by the clearing corporation. The highest margin is the peak margin of the day.

This is part of the phased adoption over the next 6 months each and full adoption is expected to happen by September 1, 2021.

Phase 1 (Dec 2020-Feb 2021) – The client should have 25% of the peak margin available with the broker.

Phase 2 (Mar 2021-May 2021) – The client should have 50% of the peak margin available with the broker.

Phase 3 (Jun 2021-Aug 2021) – In the third phase, SEBI has said that the client should have 75% of the peak margin.

Phase 4 (Sep 2021 onwards) – By Sep 2021, clients should have 100% of the peak margin obligation available with the broker during the day.

SHOULD YOU INVEST IN NCDs

 

NCDs are Fixed Income Instruments for Assured Returns Non Convertible Debentures (NCDs) or Bonds are debt investments in which you lend money to a corporate or government entity that borrows the funds, for a specified period of time at a fixed interest rate.

NCDs are suitable for

·         Stable consistent return with least risk

·         Consistent periodic return rather than lump sum return

·         Low risk appetite

·         Diversification of portfolio with debt instrument

NCDs Benefits

·         Return is relatively higher in NCDs than a lot of other investment avenues.

·         No income tax is deductible at source as per the provisions of Sec 193 of the IT Act.

·         NCDs are listed and traded on the exchange, hence providing liquidity to the investor.

·         Agencies like CARE, FITCH, CRISIL, ICRA rate NCD's that are good indicator of quality of debt paper.

·         As NCDs are only in Demat online form, it is easier to handle and track.

Difference between NCD and Bond

NCDs are issued by public companies, whereas bonds are issued by government entities, large companies, and financial institutions to raise capital for the business purpose. Bonds are generally secured, whereas NCDs can be secured and unsecured.

What are Convertible and Non Convertible Debentures

Convertible debentures are those type of debentures that can be converted into equity shares of the company. Non-convertible debentures are those debentures that cannot be converted into equity shares of the company.

Type of NCDs

Secured NCDs: Secured NCDs are considered safer of the two kinds as their issues are backed by the assets of the company. In the event of the company failing to pay on time, then the investors can recover their dues by liquidating the company’s assets. However, the interest offered on NCDs is low.

Unsecured NCDs: Unsecured NCDs are much riskier than the secured NCDs as the assets of the company do not back these. Hence, when the company defaults on its payment, the investors have no choice but to wait until they receive payments as there are no assets of the company to recover their dues. However, the interest rate offered on unsecured NCDs is higher than that of secured NCDs.

Is NCDs interest Taxable

In short term (Less than 1 year) NCDs are taxed at your slab rate, which means if you are in the highest tax bracket, the interest you earn will be taxed at 30%.

In long term capital gain tax is 10%. NCDs can work for those in the lower tax category or those with no taxable income.

 

Don’t let high interest rates sway you, look at the risks

IIFL Finance to raise up to ₹1,000 crore through Public Issue of Unsecured Subordinated Redeemable NCD

IIFL Finance Limited (Formally known as IIFL Holding Limited)  will launch its  public issue of unsecured subordinated redeemable non-convertible debenture to raise up to Rs.1000 cr with a base issue size of Rs 100 cr and a green-shoe option to retain over subscription of up to Rs 900 cr, for the purpose of business growth and capital augmentation.

The bonds offer up to 10.03% yield for a tenor of 87 months and is thus provide an advantage against interest rate fluctuations in future. The issue has been rated AA by Crisil and AA+ by Brickwork.

Features of IIFL Finance NCD March, 2021 – Tranche I

Issue start date: 3-March-2021

Issue end date: 23-March-2021 (with an option of early closure)

It offers NCD bonds for 87 months tenure (7 years 3 months).

Coupon interest rates are between 9.6% to 10%. The yield is up to 10.03%.

These are unsecured Non Convertible Debentures.  

Face Value Rs.1000.

Minimum investment Rs.10000

These NCD bonds would be listed on NSE & BSE to provide liquidity to investors.

NRI’s cannot apply to this NCD subscription.

The allotment will be made on first come first served basis

The lead managers to the issue are Edelweiss Financial Services Limited, IIFL Securities Limited and Equirus Capital Private Limited.

NCD’s are available in the 3 series.  

·         Series-I would provide interest every year,

·         Series-II would provide monthly

·         Series-III would provide interest only on maturity.

Interest payable frequency are monthly, yearly and on maturity depending on the option chosen by the NCD investor.  

IIFL has 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.IIFL Finance's loan assets under management stand at Rs 42,264 cr. The company's 90 per cent of the book is retail which is focused on small ticket loans.

IIFL Finance had a gross non-performing asset (NPA) ratio of 1.61% and a net NPA ratio of 0.77% and its total capital adequacy ratio stood at 21.4% at the end of December 2020. In Q3 FY21, IIFL Finance reported a profit after tax of ₹268 crore. up by 26 per cent from the year-ago period. The return on equity was 18.4 per cent.        

IIFL Finance stock was trading at Rs 277 on NSE, 26 Feb 2021 at 3:30pm, down 0.32 per cent from previous close.   

To free demat account click here: https://zerodha.com/?c=YR1785 

Live Public Issue (IPO) Invest wisely and double your money within a year or Sooner.

Initial Public Offer (IPO), is the first sale of shares by the privately owned company to the public. The companies going public raises funds through IPO for working capital, debt repayment, acquisitions, and a host of other uses.

The investor can apply for IPO Stocks by filling an IPO Application Form. These forms are usually available with stockbrokers for free. The investor can also apply for IPO Stocks online through kotak security, Angel Broking, Reliance Money and Zerodha etc. To open online account click at below link:

https://zerodha.com/?c=YR1785

Security Name	Start Date	End Date	Offer Price	Face Value	Type of Issue	Issue Status
Muthoot Fincorp Limited	18-02-2021	09-03-2021			Debt Issue	Live
RBL*	27-10-2020	26-04-2021	825.00	10.00	BuyBack	Live
HINDPETRO*	17-11-2020	14-05-2021	250.00	10.00	BuyBack	Live
SREEL*	04-12-2020	03-06-2021	160.00	10.00	BuyBack	Live
FRSHTRP*	10-02-2021	09-08-2021	90.00	10.00	BuyBack	Live
VRLLOG*	15-02-2021	14-08-2021	300.00	10.00	BuyBack	Live
ANUP*	24-02-2021	23-08-2021	800.00	10.00	BuyBack	Live
PATEL INTEGRATED LOGISTICS LTD	26-02-2021	12-03-2021	10.00	10.00	RI	Live
TATA STEEL LTD.	01-03-2021	15-03-2021	461.00	7.50	RI	Forthcoming
Authum Investment & Infrastructure Ltd	01-03-2021	15-03-2021	81.00	10.00	RI	Forthcoming
Satin Creditcare Network Ltd	03-03-2021	17-03-2021	30.00	5.00	RI	Forthcoming
REMI EDELSTAHL TUBULARS LIMITED	23-02-2021	01-03-2021	19.69	10.00	Delisting	Live
NEELAMALAI AGRO INDUSTRIES LTD	24-02-2021	09-03-2021	1600.00	10.00	Buyback - Tender Offer	Live
REMI ELEKTROTECHNIK LIMITED	01-03-2021	05-03-2021	11.52	10.00	Delisting	Forthcoming