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• This is the 3rd debt offer from the company since November 2023.
• The last debt offer was in April 2024.
• It has posted an average financial performance so far.
• It is offering a lucrative coupon rates, but has a poor BBB-/Stable rating from CRISIL.
• The company has allocated 64% of the issue for the retail investors.
• Well-informed investors may park moderate funds for medium term.
ABOUT COMPANY:
ICL Fincorp Ltd. (IFL) is a non-deposit taking and a systemically important non-banking finance company ("NBFC") in the gold loan sector lending money against the pledge of household gold jewellery ("Gold Loans") in the states of Kerala, Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, Odisha, Gujarat and Maharashtra. It also provides loans against property, business loans and personal loans.
As of September 30, 2024, it had a network of 295 branches, out of which majority of the branches are located in the southern states of India i.e., Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Telangana, Odisha and in the western states of India i.e., Gujarat and Maharashtra.
It is currently registered with RBI as a non-deposit taking NBFC (registration no. B-07.00437 dated June 9, 2016) under Section 45 IA of the Reserve Bank of India Act, 1934. The Company had initially received certificate of registration dated August 18, 1999 bearing registration number 07.00437 issued by RBI under Section 45IA of the Reserve Bank of India Act, 1934 when it was incorporated as Jawahar Finance Limited, and pursuant to the change in name from 'Jawahar Finance Limited' to 'Irinjalakuda Credits & Leasing Company Limited' the company received a fresh certificate of registration dated
May 16, 2005 bearing registration number B-07.00437 issued by RBI.
The Company specializes in providing Gold Loans to individuals, primarily from middle-class families. Its Gold Loan business is built on the foundation of customer-centricity, efficiency, and with commitment to deliver seamless financial services. It is emphasizing focus on customer onboarding, loan disbursal, and the creation of an efficient ground management team. IFL has invested in technology and processes that enable quick and easy customer onboarding. This includes user-friendly digital interfaces and simplified documentation procedures, ensuring that customers can access its services with minimal effort. Its approach involves assessing the specific needs of customers and tailoring loan solutions accordingly.
The company offers special schemes with shorter tenures for customers who require quick financing with the intent to repay within a limited period. Customers with long term financial objectives can opt for schemes that provide extended repayment tenures. It has specific schemes that offer higher LTV ratios, allowing customers to avail higher loan amounts. The company offers customers a range of property loans, business loans, new and pre-owned vehicle loans ("Other Loans") along with gold loans. As of September 30, 2024, it had 1,271 employees, with 59 % of women employees.
ISSUE DETAILS:
The company is coming out with its 3rd debt offer. The company is offering 1000000 Secured, Redeemable, Non-Convertible Debentures having a face value of Rs. 1000 each. The base size of the issue is Rs. 75 cr., and the company has green shoe option to retain oversubscription to the tune of Rs. 25 cr., thus making the overall size of the debt offer to Rs. 100 cr. The issue opens for subscription on November 11, 2024, and will close on or before November 25, 2024. Post allotment, NCDs will be listed on BSE.
IFL is spending Rs. 3.27 cr. for this NCD issue and from the net proceeds, it will utilize at least 75% for onward lending, financing and for repayment of certain borrowings, and maximum up to 25% for general corporate purposes.
The issue is solely lead managed by Saffron Capital Advisors Pvt. Ltd., while Cameo Corporate Services. Ltd. is the registrar of the issue. Mitcon Credentia Trusteeship Services Ltd., is the Debenture Trustee for the issue.
The minimum application to be made is for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD (i.e. Rs. 1000) thereon, thereafter. The interest payment frequency will be Monthly, Cumulative, or Annual as per the 11.00% to 12.50%, and has a tenors of 13 months, 24 months, 36 months, 60 months, and 68 months. The company has allocated 5% for Institutional Investors, 1% for Non-Institutional Investors, 30% for HNIs and 64% for Retail investors.
CREDIT RATING:
The issue is rated as CRISIL BBB-/Stable by CRISIL Ratings and Research Ltd. The rating given by CRISIL is valid as on the date of this Prospectus and shall remain valid on date of the issue and allotment of NCDs and the listing of the NCDs on BSE. The ratings provided by CRISIL may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. These ratings are not a recommendation to buy, sell or hold securities and Investors should take their own decisions.
The rating of the NCDs by CRISIL indicates that the instruments with this rating are considered to have moderate degree of safety and moderate credit risk.
FINANCIAL PERFORMANCE:
On the financial performance front, IFL has (on a consolidated basis) posted a total income/net profit of Rs. 76.35 cr. / Rs. 2.80 cr. (FY21), Rs. 89.43 cr. / Rs. 2.71 cr. (FY22), Rs. 112.64 cr. / Rs. 3.04 cr. (FY23), and Rs. 143.57 cr. / Rs. 1.90 cr. (FY24). For Q1 of FY25 ended on June 30, 2024, it earned a net profit of Rs. 2.03 cr. on a total income of Rs. 46.98 cr. The sudden boost in its bottom line for Q1 of FY25 raised eyebrows and concern over its sustainability.
Its net NPA stood at 1.03% for Q1-FY25, against 1.33% for FY24. Its debt equity ratio of 5.71 as of March 31, 2024, will stand enhanced to 6.76 post this NCD issue (on a consolidated basis).
Review By Dilip Davda on November 10, 2024
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The ICL Fincorp Limited NCD November 2024 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if ICL Fincorp Limited NCD November 2024 worth investing. The ICL Fincorp Limited NCD November 2024 Note sets the NCD expectations in systematic way which tells you if ICL Fincorp Limited NCD November 2024 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in ICL Fincorp Limited NCD November 2024 by providing NCD recommendations i.e. subscribe, avoid and neutral.
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