The issue of secured and redeemable NCD (non-convertible debentures) from JM Financial Products Limited is currently open for subscription and closes on March 9, 2020, with an option for both extension and closure.
This NCD with pre-tax yield of up to 10% per annum looks appealing in the current scenario. This is because retail inflation has surged to 7.4% in December 2019, the highest since July 2014. Moreover, interest rate in the economy is falling and other fixed income options including bank deposits are not close to the high returns offered by this NCD.
So, if your clients have a moderate credit risk appetite and yearn for higher returns that can beat current high inflation rate on post-tax basis, you should consider JM Financial Products Ltd. NCD – Tranche III issue.
Here are the details of the issue to help you take a call on this issue.
Credibility: SEBI website shows that many top corporates and institutions, including top AMCs, hold debenture of JM Financial Products Ltd. Here are the top 10 debenture holders of JM Financial Products Ltd as on Jan 31, 2020.
|
Name of holder |
Aggregate amount (in Rs crore) |
|
ICICI Prudential MF |
558.3 |
|
Aditya Birla Sun Life MF |
300 |
|
Bank of Baroda |
150 |
|
UTI MF |
110.7 |
|
L&T MF |
108 |
|
Kotak Mahindra MF |
65 |
|
Bajaj Holdings and Investment Ltd |
50 |
|
Jindal Steel and Power Ltd Employees PF Trust |
50 |
|
Britania Industries Ltd |
50 |
|
HDFC MF |
45 |
Who can apply: Resident Indian individuals, HUFs, partnership firms, companies and body corporates, banks, public financial institutions, national investment funds, mutual funds, venture capital, insurance companies, commercial banks, co-operative banks, public/private charitable trusts, industrial research organizations and other eligible categories can invest in this NCD.
Application size: The minimum application size is Rs 10,000 for 10 NCDs as the face value per debenture is Rs 1,000. The company plans to collect Rs 100 crore with an option to retain an additional Rs 200 crore if the issue oversubscribes. Effectively, this takes the overall issue size to Rs 300 crore.
About the company: JM Financial Products Limited is registered with the Reserve Bank of India (RBI) as an NBFC. It is a subsidiary of JM Financial Limited
Credit Ratings: Both ICRA and CRISIL have assigned AA/Stable rating.
Effective yield:
|
Option |
Tenure (in months) |
Frequency of interest payment |
Coupon rate (%) |
Effective yield (%) |
|
I |
24 |
Annual |
9.50 |
9.50 |
|
II |
24 |
Cumulative |
NA |
9.50 |
|
III |
40 |
Annual |
9.70 |
9.73 |
|
IV |
40 |
Cumulative |
NA |
9.70 |
|
V |
40 |
Monthly |
9.29 |
9.70 |
|
VI |
60 |
Annual |
9.90 |
9.90 |
|
VII |
60 |
Cumulative |
NA |
9.90 |
|
VIII |
60 |
Monthly |
9.48 |
9.90 |
|
IX |
120 |
Annual |
10.00 |
9.99 |
|
X |
120 |
Monthly |
9.57 |
10.00 |
Trustee: IDBI Trusteeship Services
Listing: BSE
The Secured NCDs will be listed within six working days from the Tranche III issue closing date.
Click here to read the prospectus and the form.
