Navi Finserv NCD issue to close on 02nd June

Navi Finserv NCD issue

Indian Market
by 5paisa Research Team Last Updated: 2022-07-01T18:17:22+05:30

The NCD (non-convertible debentures) issue of Navi Finserv, which opened for subscription on 23rd May, has decided to close the NCD issue early on 02nd June. The original date for closing the issue was 10th June 2022, but due to a good response to the issue, the company has decided to pre-close the NCD issue on 02nd June itself.


A brief on Navi Finserv


Navi Finserv was floated in 2012 by Sachin Bansal, one of the co-promoters of Flipkart, the online ecommerce giant that was later sold to Wal-Mart. Nav Finserv is a financial services company, which offers digital personal loans, housing loans and loans against property. Most of the sanctions and disbursals are done electronically through its mobile app.

For the year ended March 2022, Navi Finserv had total AUM of Rs.2,949 crore, which had exhibited growth of 66% YoY. It has substantially shrunk its net losses in the March quarter and is on the verge of turning into profits. Its model of operation is mobile-first and app-only model, to make the best of the digital shift.
About the NCD Issue of Navi Finserv
 

Key details of NCD issue


These will be in the nature of secured, redeemable non-convertible debentures (Secured-NCDs). Here are key details of the issue.
 

Particulars

Details of NCD

Particulars

Details of NCD

Issue Opening

23rd May 2022

Minimum lot size

10 NCDs

Issue Closing

02nd June 2022

Total NCDs issued

30,00,000

Face Value of NCD

Rs.1,000 per NCD

Size of the issue

Rs.300 crore

Interest Rate

9.20% to 9.75%

Credit Rating

Ind/A Stable

 

All allotments will be on a first come first serve basis. There will be a total of 4 options for investors ranging from Series 1 to Series 4, and we shall see these specific series in detail later. Depending on the Series selected, the tenure can vary from 18 months to 27 months and the coupon rate can vary from 9.20% to 9.75%.
 

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How is the allotment to be done for the NCDs?


The basis of allotment will be on a first come, first serve basis. However, there are category specific quotas defined in the NCD issue as under.
 

Investor Category

Allocation (%)

Actual NCDs reserved

Institutional

20%

6,00,000

Non-Institutional

20%

6,00,000

HNI Category

30%

9,00,000

Retail Category

30%

9,00,000

Total

100%

30,00,000

 

The company will utilize the funds so raised for the purpose of boosting its capital comfort and also to boost its lendable resources. Ind/A Stable rating represents a high level of safety with respect to repayment of principal and timely payment of interest. These ratings are assigned by India Ratings.


Series I to IV NCDs: What do they imply?


The Navi Finserv NCD issue will have 4 options for the investors to choose from. Here are the 4 options that are currently available.

Details

Series I

Series II

Series III

Series IV

Interest Frequency

Monthly

Annual

Monthly

Annual

Tenor

18 months

18 months

27 months

27 months

Coupon Rate

9.20%

9.50%

9.40%

9.75%

Effective Yield

9.59%

9.57%

9.80%

9.77%

Amount on Maturity

Rs.1,000

Rs.1,000

Rs.1,000

Rs.1,000


Investors can select the NCD series of their choice. The issue and the redemption of the NCD will be at par. The extant yields on the NCD are fairly attractive by comparable yield standards on similar instruments. There are no call or put options and the issue being lead managed by AK Capital Services Ltd and JM Financial Consultants Private Ltd. Link Intime will be the registrars to the NCD issue.

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About the Author

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Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.

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