10% Edelweiss Housing Finance Ltd NCD – July’16 – Should you Invest?

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Edelweiss Housing Finance NCD - July 2016

Edelweiss Housing Finance NCD – July 2016

Edelweiss Housing Finance Ltd, a housing finance company has come out with public issue of non-convertible debentures (NCD) offering up to 10% interest rate. The issue would open on July 8 and would close on July 27, 2016.

Edelweiss Housing Finance NCD – Significant Points:

  • Offer Period: July 8 to July 27, 2016
  • Annual Interest Rates for Retail Investors: 9.50% to 10% 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” by CARE, “[ICRA] AA” by ICRA & “BWR AA+” by Brickwork
  • 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 Read – Know NCD – Investment Tips, TDS and Taxation

Edelweiss Housing Finance NCD – Investment Options:

There are 7 options of investment in Edelweiss Housing Finance Ltd NCD. The interest rates below are only for Individual investors (Category 3) as referred below.

Edelweiss Housing Finance Ltd NCD – Investment Options - July 16

Edelweiss Housing Finance Ltd NCD – Investment Options – July 16

Edelweiss Housing Finance NCD – Who can Apply?

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

  1. Category I – Institutional Portion – 20% of the issue is reserved
  2. Category II – Non-Institutional Portion – 20% of the issue is reserved
  3. Category III – Retail Individual Investor/HUFs Portion – 60% of the issue is reserved

Why you should invest?

  1. AA Credit rating means very less likely hood of credit default
  2. The interest rates are almost 2% higher than regular bank FDs
  3. The company is doing well in last few years with consistent rise in profits.
  4. This is secured NCD

Why you should not invest?

  1. 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.

Also Read: Highest Interest Rate on Recurring Deposits

How to Apply?

If you have Demat account apply through 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 have Demat Account, you can download the application form from company site or Financial Institutions and submit to collection centers.

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 NCD issues are over-subscribed before the end date.

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One thought on “10% Edelweiss Housing Finance Ltd NCD – July’16 – Should you Invest?

  1. Hi, very informative article.
    I am 28 years old and I am searching for good investment options. I just came to know about peer to peer lending as an emerging platform in India and wanted your views on that.

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