Indel Money Oct 24 NCD Issue review (May apply)

• This is the 5th debt offer from the company since September 2021.
• The last debt offer was in the month of January 2024.
• It marked growth in its top and bottom lines from FY23 onwards.
• It has increased the coupon rates for this debt offer.
• Average rating of CRISIL BBB+/Stable raises concern.
• Well informed/ cash surplus investors may park moderate funds.

ABOUT COMPANY:
Indel Money Ltd. (IML), an NBFC-ML in the gold loan sector lending money against the pledge of household gold jewellery ("Gold Loans") in the states of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Odisha, Maharashtra and Telangana and the union territory of Puducherry.

It belongs to the Indel Group, which entered into the regulated financial services business at a small village in Palakkad, Kerala under a State Government Money lenders license. Over the years the Group has diversified its presence from being a financial services company to automobile dealership, hospitality, infrastructure development, media, communication and entertainment. It offers customers a range of loans against property, business loans and personal loans ("Other Loan") along with Gold Loans.

Its Gold Loan portfolio (excluding off-balance sheet assets) for quarter ended June 30, 2024, and Fiscal 2024, 2023 and 2022 amounted to Rs. 914.82 cr., Rs. 873.76 cr., Rs. 579.23 cr. and Rs. 422.76 cr. which is 85.70%, 84.64%,79.35% and 80.51% of its total loans and advances (excluding off-balance sheet assets) as on such specific dates. IML, as on September 30, 2024, had a network of 324 branches spread in the states of Haryana, Uttar Pradesh, Delhi, Madhya Pradesh, Odisha, Maharashtra, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, Telangana, Andaman and Nicobar, Gujarat, and the union territory of Puducherry. As of June 30, 2024, its total outstanding AUM (excluding off-balance sheet assets) was Rs. 1067.41 cr.

IML is a technology driven company and endeavours to make its customer experience as seamless as possible. The Company has put in place well defined and efficient process that enables it to achieve uniformity in operations across all branches. Its entire gold loan life cycle i.e., from origination to closure has been digitised with ability to real time MIS. Its processes are developed at the Corporate Office level by professionals who have extensive experience in the areas of banking and financial services with supervision from management. As of September 30, 2024, it had 1,747 employees.

ISSUE DETAILS:
The company is coming out with its 5th debt offer of Secured redeemable non-i.e. Rs. 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE.

The company has allocated 10% for Category I (Institutional), 40% for Category II (Non-Institutional), and 50% for Category III (Retail Investors).

The company will be spending Rs. 2.72 cr. for this entire debt offer of Rs. 150 cr. From the net proceeds, the company will utilize at least 75% for onward lending, financing, repayment/prepayment of certain borrowings with interest and maximum up to 25% for general corporate purpose.

The issue is solely lead managed by Vivro Financial Services Pvt. Ltd., Vistra ITCL (India) Ltd. is the debenture trustee and Link Intime India Pvt. Ltd. is the registrar to the issue. The company has changed its debenture trustee for this issue.

This issue has tenures of 366 days, 18 months, 30 months, 60 months and 66 months for secured NCDs The company is offering interest rates ranging from 10.00% to 12.00%. The interest payments have monthly and cumulative modes as per the options the investors.

ISSUE RATING:
This debt offer is rated CRISIL BBB+/Stable by CRISIL Ratings Ltd. The instruments with this rating are considered to have moderate degree of safety and moderate credit risk. 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.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, IML has reported total income/net profit of Rs. 94.49 cr. / Rs. 9.49 cr. (FY21), Rs. 123.00 cr. / Rs. 2.11 cr. (FY22), and Rs. 187.30 cr. / Rs. 20.54 cr. (FY23), Rs 291.13 cr. / Rs. 39.86 cr. For Q1 of FY25 ended on June 30, 2024, it earned a net profit of Rs. 14.22 cr. on a total income of Rs. 78.77 cr.

Its debt-equity ratio of 4.30 as of March 31, 2024 will stand enhanced to 5.01 post this debt issue. As of the said date, its net NPA stood at 4.70%, up from 3.17% as of March 31, 2024. This is a major concern.

Conclusion / Investment Strategy

Though this debt offer has increased coupon rates, average rating of BBB+ raise concerns. It marked growth in its top and bottom lines from FY23 onwards. Rising NPAs are alarming. Well informed /Cash surplus investors seeking regular income may park moderate funds for medium term.

Review By Dilip Davda on October 14, 2024

Review Author

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 Indel Money NCD October 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 Indel Money NCD October 2024 worth investing. The Indel Money NCD October 2024 Note sets the NCD expectations in systematic way which tells you if Indel Money NCD October 2024 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Indel Money NCD October 2024 by providing NCD recommendations i.e. subscribe, avoid and neutral.

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Indel Money Oct 24 NCD Issue review (May apply)

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