DHFL or Dewan Housing Finance Corporation is one of India’s leading non-banking finance companies. DHFL is issuing an NCD (non-convertible debenture) that offers interest rates in the range of 8.6-9.1% depending on the tenure, the status of the investor and payment frequency chosen. This is almost two percentage points higher than corresponding bank FD rates which have only recently been revised higher.
DHFL’s primary business is giving home loans and other types of lending. Unlike banks, NBFCs cannot accept fixed deposits, but they can accept company fixed deposits or issue NCDs such as the current one. The NCD will have tenures of 3, 5, 7 and 10 years. It also has a ‘floating rate’ option which will pay MIBOR + 2.16%. MIBOR is the Mumbai Inter-bank rate which currently stands at 6.04%. You can find a full table of rates here.
The company is also offering different rates to different types of investors. It has divided investors into four categories. They are Category I (public financial institutions, mutual funds etc), Category II (companies, partnerships etc), Category III (Resident Individuals and HUFs investing more than Rs 10 lakh) and Category IV (Resident Individuals and HUFs investing less than Rs 10 lakh). The issuance has been rated AAA by two credit rating agencies, CARE and Brickwork.
The company will pay an additional 0.1% interest to senior citizens. It will also offer a loyalty bonus of up to 1%, payable at maturity.
How to Apply?
You can download the application form here and submit it to the branches of any one of the ‘lead managers’ of the issue such as ICICI Bank, Axis Bank, IndusInd Bank or IIFL. You can find a full list of lead managers in the prospectus for the issue, which you can download here.
Minimum Investment: Rs 10,000
Tenure: 3, 5, 7 and 10 years
Payment Frequency: Annual or Monthly (for 3 and 5-year tenures)
Issuance: Physical and Demat
Issue Size: Rs 3,000 crore with an option to retain additional Rs 9000 crore of over-subscription
Issue Period: 22nd May to 4th June