The eagerly anticipated new NCD IPO from INDIABULLS HOUSING Finance Limited is scheduled for September 6th, 2023. As the third-largest Housing Finance Company in India, there is a great deal of anticipation surrounding this opportunity, with many investors keen to participate. Indiabulls specializes in offering a wider range of financial services associated with Real Estate and Housing. Its primary focus is on offering mortgage loans, home loans, and other financial products related to the Housing sector.
Detailed Information of INDIABULLS HOUSING FINANCE NCD IPO
| Name of the issuer | INDIABULLS HOUSING FINANCE LIMITED |
| Tenure | Upto 120 Months |
| Coupon | Upto 10.25%+ 0.50% (Category III & IV) |
| Yield | Upto 10.24% +0.50% (Category III & IV) |
| Issue Open date | September 6, 2023 |
| Issue Closure date | September 20, 2023** |
| Face Value | Rs.1000 |
| Nature of the Instrument | Secured Redeemable Non-Convertible Debentures |
| Minimum Application | 10 NCDs (Rs.10,000.00) & multiple of 1 NCD thereof |
| Listing | BSE & NSE |
| Rating | “CRISIL AA/Stable”, “[ICRA] AA (Stable)” |
| Issue Size | Base Issue of Rs.100 Cr with a Green Shoe option of Rs. 100 cr aggregating up to Rs. 150 Cr |
| Allotment Date | 26- Sep- 2023 |
| Listing Date | 28 –Sep – 2023 |
Issue Break up
| Category | Allocation | Amount in Crs. | |
| Base Issue Issue | |||
| Institutional Investors | 30% | 30 | 60 |
| Non-Institutional Investors | 10% | 10 | 20 |
| HNI | 30% | 30 | 60 |
| Retail Individual Investors | 30% | 30 | 60 |
| Total | 100% | 100 | 200 |
About Issuer
Indiabulls Housing Finance plays a vital role in enabling home ownership in India by offering individuals the required financial assistance for buying or building houses. Additionally, they offer financial backing for real estate investments, home improvements, and various other housing-related requirements.
The company generally offers competitive interest rates, adaptable repayment choices, and a range of loan products designed to address its customers’ various requirements. Indiabulls Housing Finance has built a robust nationwide presence through a network of branches and offices, ensuring accessibility to a broad customer base.
Products offered by INDIABULLS Housing Finance Limited
- Housing Loans and Loans against property
Its main focus is on providing housing loans and loans secured against property to our intended customer groups, which include both employed and self-employed individuals, micro, small, and medium-sized businesses (MSMEs), as well as larger corporations.
- Mortgage Loans to Real estate Developers
It offers mortgage loans to real estate developers in India in the form of lease rental discounting for commercial premises and construction finance for the construction of residential premises.
INDIABULLS Housing Finance Limited Subsidiaries across Various Sectors
- Indiabulls Commercial Credit Limited
- Indiabulls Asset Management Company Limited
- Indiabulls Collection Agency Limited
- Ibulls Sales Limited
- Indiabulls Capital Services Limited
- Indiabulls Advisory Services Limited
- Indiabulls Insurance Advisors Limited
- Indiabulls Trustee Company Limited
- Indiabulls Holdings Limited
- Indiabulls Asset Holding Company Limited
- Nilgiri Financial Consultants Limited
- Indiabulls Investment Management
- Indiabulls Asset Management Mauritius (Foreign Company)
Credit Strength of Indiabulls Housing Finance Limited
- Strong capitalization with healthy cover for the asset-side risk
The company has shown strong ability in raising funds, including a Rs 683 crore equity infusion through qualified institutional placement (QIP) in fiscal 2021. The planned capital increase (of at least USD 275 million) will strengthen its capital position in the near future, enhancing its financial stability. This strong capitalization is expected to sustain the company’s overall financial stability in the medium term.
- Comfortable Asset quality in the Retail segment
Indiabulls Housing Finance (IBHFL) had a relatively good asset quality in its retail lending segments. However, by June 30, 2021, their non-performing assets (NPAs) increased slightly to 2.9% from 2.7% on March 31, 2021, mainly due to difficulties in loan repayments during the second wave of Covid-19. IBHFL uses precautionary measures like lower loan-to-value ratios in the loan against property segment and focuses on collateral in commercial real estate. The potential for a significant increase in NPAs, especially in commercial credit, and its impact on profitability, is a key factor in influencing IBHFL’s credit rating.
Financial Table detailing different Series of NCDs issued by the INDIABULLS Housing Finance Limited
| Series | I | II | III | IV* | V | VI | VII | VIII | IX | X | XI | XII |
| Frequency of Interest Payment | Annual | Monthly | Cumulative | Annual | Monthly | Cumulative | Annual | Monthly | Annual | Monthly | Annual | Monthly |
| Tenor | 24 months | 24 months | 24 months | 36 months | 36 months | 36 months | 60 months | 60 months | 84 months | 84 months | 120 months | 120 months |
| Coupon (% per annum) for NCD Holders in Category I & II | 9.25% | 8.88% | NA | 9.40% | 9.02% | NA | 9.65% | 9.25% | 10.00% | 9.57% | 10.25% | 9.80% |
| Coupon (% per annum) for NCD Holders in Category III & IV | 9.65% | 9.25% | NA | 9.90% | 9.48% | NA | 10.15% | 9.71% | 10.50% | 10.03% | 10.75% | 10.25% |
| Effective Yield (per annum) for NCD Holders in Category I & II | 9.24% | 9.24% | 9.25% | 9.39% | 9.39% | 9.40% | 9.64% | 9.64% | 9.99% | 9.99% | 10.24% | 10.24% |
| Effective Yield (per annum) for NCD Holders in Category III & IV | 9.64% | 9.64% | 9.65% | 9.88% | 9.89% | 9.90% | 10.14% | 10.14% | 10.49% | 10.49% | 10.74% | 10.74% |
| Redemption Amount (₹ / NCD) on Maturity for NCD Holders in Category I & II | Rs. 1000 | Rs. 1000 | Rs.1193.85 | Staggered Redemptio n in Three (3) annual payments of ₹ 333.33 for year 1, ₹ 333.33 for year 2 and ₹ 333.33 for year 3 starting from 1st Anniversar y* until Maturity | Staggered Redemptio n in Three (3) annual payments of ₹ 333.33 for year 1, ₹ 333.33 for year 2 and ₹ 333.33 for year 3 starting from 1st Anniversar y* until Maturity | Rs. 1,309.70 | Staggered Redemptio n in Five (5) annual payments of ₹200 each, starting from 1st Anniversar y* until Maturity | Staggered Redemptio n in Five (5) annual payments of ₹200 each, starting from 1st Anniversar y* until Maturity | Staggered Redemptio n in Seven (7) annual payments of ₹142.86 each, starting from 1st Anniversar y* until Maturity | Staggered Redemptio n in Seven (7) annual payments of ₹142.86 each, starting from 1st Anniversar y* until Maturity | Staggered Redemptio n in Ten (10) annual payments of ₹100 each, starting from 1st Anniversar y* until Maturity | Staggered Redemptio n in Ten (10) annual payments of ₹100 each, starting from 1st Anniversar y* until Maturity |
| Redemption Amount (₹ /NCD) on Maturity for NCD Holders in Category III & IV | Rs. 1000 | Rs. 1000 | Rs. 1202.65 | Staggered Redemptio n in Three (3) annual payments of ₹ 333.33 for year 1, ₹ 333.33 for year 2 and ₹ 333.33 for year 3 starting from 1st Anniversar y* until Maturity | Staggered Redemptio n in Three (3) annual payments of ₹ 333.33 for year 1, ₹ 333.33 for year 2 and ₹ 333.33 for year 3 starting from 1st Anniversar y* until Maturity | Rs. 1,327.75 | Staggered Redemptio n in Five (5) annual payments of ₹200 each, starting from 1st Anniversar y* until Maturity | Staggered Redemptio n in Five (5) annual payments of ₹200 each, starting from 1st Anniversar y* until Maturity | Staggered Redemptio n in Seven (7) annual payments of ₹142.86 each, starting from 1st Anniversar y* until Maturity | Staggered Redemptio n in Seven (7) annual payments of ₹142.86 each, starting from 1st Anniversar y* until Maturity | Staggered Redemptio n in Ten (10) annual payments of ₹100 each, starting from 1st Anniversar y* until Maturity | Staggered Redemptio n in Ten (10) annual payments of ₹100 each, starting from 1st Anniversar y* until Maturity |
| Maturity (from the Deemed Date of Allotment)Months | 24 | 24 | 24 | 36 | 36 | 36 | 60 | 60 | 84 | 84 | 120 | 120 |
| *The Company shall allocate and allot Series IV NCDs wherein the Applicants have not indicated the choice of the relevant NCD Series. | ||||||||||||
Company Financial Data
Below are the essential accounting and financial metrics of INDIABULLS Housing Finance Limited, which are vital for evaluating the company’s financial well-being.
| AUM | GNPA | NPA |
| 69816 | 3.30% | 2.20% |
| Year | 2021 | 2022 | 2023 |
| Total Income | 10030 | 8994 | 6,648 |
| PAT | 1202 | 1177 | 8671 |
| AUM | 80741 | 72211 | 69816 |
Conclusion
In conclusion, the upcoming NCD IPO by INDIABULLS Housing Finance Limited in September 2023 presents a noteworthy financial prospect for investors. This opportunity allows individuals to invest in non-convertible debentures, potentially yielding appealing returns. Nevertheless, like all investments, it carries inherent risks. Therefore, investors should diligently assess their investment objectives, risk tolerance, and the terms of the NCDs before deciding to participate.