Should you subscribe to JM Financial Products Ltd Secured NCD?

Published on Friday, September 24, 2021 by Chittorgarh.com Team | Modified on Saturday, December 4, 2021

The First Tranche of the Non-Convertible Debenture (NCD) issue of JM Financial Products Ltd aggregating to Rs 500 crore has opened for subscription on Thursday, September 23^rd, 2021. The four series issue comes with a floating interest rate option on the shorter end of the maturity curve while the company is offering interest rates ranging from 7.91% to 8.30% per annum for the bonds with longer tenure. Here is the lowdown on JM Financial Products NCDs that will help investors like you to take an informed call on investing in the NCD.

JM Financial Products NCD Issue Highlights

Series	I	II	III	IV***
Interest Type	Floating**	Fixed	Fixed	Fixed
Frequency of Interest Payment #	Annual	Annual	Monthly	Annual
Minimum Application	Rs. 10,000 (10 NCDs) across all Series collectively
Face Value/ Issue Price of NCDs (Rs/ NCD)	Rs. 1,000 (1 NCD)
In Multiples of thereafter (Rs)	Rs. 1,000 (1 NCD)
Tenor	39 months	60 months	60 months	100 months
Coupon (% per annum) for all categories of NCD Holders	91-day T-bill* + 315 bps spread	8.20%	7.91%	8.30%
Effective Yield for all categories of NCD Holders	-	8.19%	8.20%	8.30%
Amount (Rs / NCD) on Maturity for all categories of NCD Holders	1,000.00	1,000.00	1,000.00	1,000.00
Maturity / Redemption Date (Months from the Deemed Date of Allotment)	39 months	60 months	60 months	100 months
Put and Call Option	Not applicable

Rating

[ICRA] AA/(STABLE) by ICRA and CRISIL AA/STABLE by CRISIL. Such rating indicates high degree of safety regarding timely servicing of financial obligations.

Company Profile

JM Financial is a "Systemically Important Non - Deposit Taking NBFC" (NBFC-ND-SI) registered with the Reserve Bank of India and operates under the "JM Financial" franchise. Incorporated as J.M. Lease

Consultants Private Limited on July 10, 1984, we are focused on offering a broad suite of loan products which are customized to suit the needs of the corporates, institutions, SMEs and individuals. Our

Company broadly operates under the following verticals viz. (i) Bespoke financing; (ii) Real estate financing; (iii) Capital market financing; (iv) Retail mortgage financing; and (v) Financial institution financing.

Objective of the issue

The funds raised through the Tranche I Issue will be used for the purpose of onward lending, financing, and for repayment / prepayment of interest and principal of the borrowings of the Company (at least 75%) and for general corporate purposes (up to 25%).

Conclusion

On the whole, it is safe to invest in JM Financial Products NCD issue given the low interest rate profile of other competing investment options like bank FDs currently available in the market. It also seems to have ticked most of the right boxes like high credit rating, security, attractive interest rates and choice of tenure to match investors' risk profile.

Comments

Add a public comment...

More articles in this category...List of all Articles