Aadhar Housing Finance Ltd (formerly DHFL Vysya Housing Finance Ltd) has announced the issue of Secured Non-Convertible Debentures (NCDs) at an interest up to 9.75%. Aadhar Housing is promoted by Wadhawan Global Capital which also owns DHFL (a prominent NBFC) and DHFL Pramerica, a mutual fund.
The issue has been rated AA+ by CARE Ratings and AA+ by Brickworks Ratings. Aadhar Housing Finance will list the NCDs on the BSE within 10 working days from the closure of the issue. The NCD issue opened on 14th September 2018 and will close on 28th September 2018.
The company proposes to raise Rs 500 crore through the NCD issue with an option to retain another Rs 900 crore in case of oversubscriptions. The company will use 75-100% of the money raised to repay existing debts and 0-25% for general corporate purposes. The NCDs are secured in nature, meaning that they are backed up by specific assets in case of a repayment failure. They carry a face value of Rs 1,000 each and the minimum subscription required is Rs 10,000. Only Resident Indians can apply for the NCDs, NRIs are not eligible.
|Tenure||3 years||5 years||10 years|
Coupon = Periodic Interest Payment. Effective yield = Return you get if interest payments are reinvested at the same rate.
How to apply
You can download application forms and submit at the branches of the lead managers of the issue. Yes Bank, Yes Securities, Edelweiss, Axis Bank, AK Capital, Greenbridge Capital Advisory and Trust Investment Advisors are lead managers to the issue. The application can be ASBA (application supported by blocked amount) or non-ASBA. In case of ASBA, the money gets blocked but not deducted from your account till you get the allotment or the issue process concludes. In case of non-ASBA, you have to submit a payment instrument along with the application form such as a cheque or demand draft.
Aadhar Housing Finance is part of a reputed financial services group and is offering attractive yields (9.6-9.75%) on its NCDs. However, remember the NCD interest is taxed at your slab rate. Buying the same NCDs through an FMP will not only get you the benefits of diversification (an FMP invests in many NCDs) but also lower tax treatment. FMPs held for over three years are taxed at 20% and also there is the benefit of indexation.