12% IIFL Secured Bond issue opens today (September 17, 2013)

12% IIFL Secured Bond issue opens today (September 17, 2013)

India Infoline Finance Limited opens its 12% secured bond issue today, Tuesday, September 17, 2013. These bonds have an option of monthly and annual interest payment and the yield works out to 12.68% p.a. for the monthly interest option and 12%p.a. for the annual interest option.

Mr. Nirmal Jain, Chairman, India Infoline Group, said, “A yield of 12.68% p.a. is ideal for those investors looking for stable, secured and sustained monthly income.  Investors can invest in these bonds through our touch points of over 3,800 business locations and the additional network of our Lead Managers and brokers.”

Mr. V K Chopra, Chairman, India Infoline Finance Limited, said, “We have always enjoyed the trust and confidence of investors.. In a challenging environment, we have managed to keep our NPAs under control. The Long-term debt rating of the company has improved despite difficult business environment, indicating robust business model.”

The NCDs proposed under this Issue have been rated ‘CARE AA’[Double A] by CARE and ‘BWR AA (Outlook:Stable)' by Brickwork. The rating indicates instruments are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.  The Bonds are secured and classify as senior debtbacked by assets held by a trustee. Besides, the company maintains a debenture redemption reserve as prescribed by the regulator.

There is No TDS (tax deducted at source) if bonds are held in demat form, therefore, cash flow is full 12%. Investors can sell bonds at prevailing market rates on the two exchanges (BSE and NSE) upon listing. The interest rate remains fixed because there is no Call and Put option available, which means the company cannot prematurely redeem the bonds. Investment can be in physical and dematerialised form for resident Investors. Both minors and NRIs can also apply.

The face value of each NCD is Rs. 1,000 and the minimum application amount is Rs. 5,000 (5 NCDs). The NCDs have an investment horizon of 3 years and 5 years. Allotment is on a first-come-first-served basis except on the last day where, in case of an oversubscription, the allotment would be made on a proportionate basis. The issue closes on October 4, 2013.