IT’S RAINING IPOS!!!
Given the sentiments amongst investors, one can expect more companies to join the IPO crusade.
It’s raining IPOs, with three issues hitting the market in a span of four days, the pace of new filings points to a deluge during the last month of the year. So far this year, fifteen companies have filed their draft red herring prospectus (DRHP) with the market regulator for Debt initial public offerings (IPOs).
“India has made significant strides in macroeconomic stability, and its government is more motivated than ever to encourage corporate-investment-driven growth,” says Chief India Economist Upasana Chachra. India is demystifying to see a VIBRANT and LIQUID Bond Market in the coming few years. And the BOND MARKET is here to stay!
But the IPO is wholesome!
You might want to sit down for this one. Too good if you already are. The eternal adage of eating healthy food and getting enough sleep just got added with another point: Don’t miss the wholesome investment opportunities. Edelweiss Financial Services Ltd, IIFL Home Finance Ltd, and Indiabulls Housing Finance Ltd are all set to open the gates again for investors for IPO bidding on the 6th, 8th, and 9th of December this year.
New IPO Issuances
Edelweiss Financial Services Ltd is one of India`s leading financial services conglomerates, offering a robust platform to a diversified client base across domestic and global geographies. Key Businesses include Credit (Retail, Corporate), Investment & Advisory (Wealth Management, Asset Management), and Insurance (Life, General).
IIFL Home Finance Ltd IIFL is a subsidiary of IIFL Finance Limited. With a wide spread of more than 125 branches across India, it offers Affordable Home loans, Non-Metro Housing loans, Home purchases, Home Renovation, Home Construction, and Plot purchases.
Indiabulls Housing Finance Ltd is a mortgage lender headquartered in Gurugram, Haryana, India. It is India’s second-largest housing finance company and is regulated by the National Housing Bank. It is part of the Indiabulls group and contributes approximately 80% of the group’s turnover.
| EDELWEISS FINANCIAL SERVICES LIMITED | IIFL HOME FINANCE LIMITED | INDIABULLS HOUSING FINANCE LIMITED | |
|---|---|---|---|
| Rating | AA- (CRISIL) | AA(CRISIL) | AA(CRISIL) |
| Industry | Financial Services | Housing | Housing |
| Issue Size | Rs 500 Crore | Rs 1000 Crore | Rs 1000 Crore |
| Coupon Rate (up to) | 9.70% | 8.75% | 9.25% |
| Tenure (up to) | 120 months | 84 months | 60 months |
| Security | Secured | Secured | Secured |
| Minimum Investment | Rs 10,000 | Rs 10,000 | Rs 10,000 |
| AUM | Rs 32.84 Lakh Crore | Rs 44,249 Crore | Rs 86,566 Crore |
| NPA | NA | 1.10% | 1.59% |
| PAT | Rs. 2539 Crore | Rs 401 Crore | Rs 1202 Crore. |
Yield Comparison
| TENURE | 24 MONTHS | 36 MONTHS | 60 MONTHS | 84 MONTHS | 120 MONTHS |
|---|---|---|---|---|---|
| Edelweiss Financial Services Limited | 8.75% | 9.10% | 9.55% | NA | 9.70% |
| IIFL Home Finance Limited | NA | 8.25% | 8.50% | 8.75% | NA |
| Indiabulls Housing Finance Limited | 8.75% | 9.00% | 9.25% | NA | NA |
Which IPO should you invest in The Risk-Reward?
Keeping all factors status quo, we believe it would be a smart decision to invest in the Indiabulls Housing Finance IPO as compared to IIFL Home Finance as Indiabulls Housing Finance provides a higher coupon interest rate while having the same credit rating and belonging to the same industry.
If you are looking for an investment with a higher return with a slightly higher risk, we believe it would be a smart decision to invest in Edelweiss Financial Services Limited as compared to IIFL Home Finance as Indiabulls Housing Finance provides a higher coupon interest rate while having the one notch lower rating.
The Secondary Bond Market
A secondary market is a platform wherein investors can freely buy or sell securities without the interference of the issuing companies. The defining characteristic of the secondary market is that investors trade among themselves i.e. securities are traded at prices determined by demand and supply.
Let’s have a look at indicative yields of the issuers and where one should invest in the IPO or could give a miss?
Edelweiss Financial Services Limited is trading at a yield of about 9.75%-10% today which is much higher than the rates provided by the IPO. Investors could thus give the IPO a miss and invest in secondary markets. On a similar note, Indiabulls Housing Finance Limited is trading at a yield of around 9.50% today which is slightly higher than the IPO rates.
Whereas, IIFL is trading at a yield of around 9% which is in the same range as the IPO rates. Investors could thus look at investing in the IPO.
Trading in the bond market hasn’t been easier?
Today, retail investors can easily purchase and sell bonds through online portals like BondsIndia wherein investors are provided with a variety of investment options to choose from, Price transparency, Liquidity, and a lot more!
Why choose Bonds India?
Bonds India is an online platform for fixed-income securities such as IPOs, bonds, 54EC bonds, and fixed deposits. With a cumulative pedigree of 50+ years in the bond market, we aim to democratize the market for common investors by stationing detailed insights, and expert advice, and keeping a close watch on the market sentiment. Bonds India brings up-to-date information when IPOs go live, fixed deposits with higher interests, and bonds with a competitive price before anyone else.
Bonds India ditches the traditional ways of investing by offering a blockchain-based platform for investors that ensures instant online settlements and reduces counter-party risks. Choose Bonds India for its sleek interface, fail-safe communication, and a step-by-step guide to ensure a well-placed bid. You can apply for IIFL Home Loans NCD IPO on the BondsIndia website.
Invest in just three simple steps:
Parting Note
IPO is a fish in the vast ocean of the Bond Market. The Bond market comprises a variety of products tailored to suit the requirement of different individuals. Besides investing in a Bond IPO, investors can also look at investing in AAA-rated Securities, Government Securities, 54 EC Bonds, etc.
Typically, as of date, you could purchase an AAA-rated bond (Safest Credit Rating) at a yield starting from 7.50%. Grab the deal before it’s too late. Log in for more details.
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