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How to invest in Indiabulls Housing Finance Limited March 2022 NCD IPO?

Neha

Neha

Mar 28, 2022

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How to invest in Indiabulls Housing Finance Limited March 2022 NCD IPO?

“Don’t sit back and wait for the change in Game - Feel the beat and invest in Indiabulls IPO”  Ride the wave of capital preservation. Connect your friends and family. Call if you have to, but don’t miss out on the bidding of the IPO bond. Indiabulls Housing Finance Limited is all set to open the gates for investors for IPO bidding on March 30th this year. 
Indiabulls Housing Finance Ltd (“IBHFL”) is one of the largest housing finance companies (“HFCs”) in India in terms of AUM. It is a non-deposit-taking HFC registered with the National Housing Board (“NHB”). IBHFL focuses primarily on long-term secured mortgage-backed loans. 
The Indiabulls Housing Finance Ltd IPO has been rated AA/Stable, by CRISIL Ratings Limited and AA+/Stable, by Brickwork and providing interest up to 9.25%, up to a tenure of 60 months. All you need to do is set a reminder on the BondsIndia website and place your bid as we send you a reminder when it goes live. 

About the NCD Issue (company stats, standings, etc.)

Issuer INDIABULLS HOUSING FINANCE LIMITED 
Type of instrument Secured, Redeemable, Non-Convertible Debenture 
Listing To be listed on BSE and NSE 
Issue Size Public issue by the Company of secured redeemable non-convertible debentures of the face value of ₹1,000 each (“NCDs”) for an amount up to ₹100 crores (“Base Issue Size”) with a greenshoe option of ₹900 crores aggregating up to ₹1,000 crores. 
Issue Price Rs.1,000 per NCD 
Minimum Investment 10 NCDs (Rs.10, 000) & in multiple of 1NCD 
Issue Opening Date Wednesday, March 30, 2022 
Issue Closing Date Friday, April 22, 2022*  *Issue may close on such earlier date or extended date as may be decided by the Board of Directors of the Company or Securities 
Mode of Issuance Dematerialized mode only  

Yield (p.a.)

Series
I
II
III
IV
V
VI
VII
VIII
Frequency of Interest Paymet
Annual
Cumulative
Monthly
Annual
Cumulative
Monthly
Annual
Monthly
Tenor
24
Months
24
Months
24
Months
36
Months
36
Months
36
Months
60
Months
60
Months
Coupon (%per annum) for NCD Category I & II
8.35%
NA
8.05%
8.50%
NA
8.20%
8.75%
8.43%
Coupon (%per annum) for NCD Holders in Category III & IV
8.75%
NA
8.42%
9.00%
NA
8.66%
9.25%
8.89%
Effective yield (per annum) for NCD Holders in Category I & II
8.34%
8.35%
8.36%
8.49%
8.50%
8.51%
8.74%
8.76%
Effective yield (per annum) for NCD Holders in Category III & IV
8.74%
8.75%
8.75%
8.99%
9.00%
9.01%
9.24%
9.26%
Amount ( ₹ / NCD) on Maturity for NCD Holders in Category I & II
₹ 1000
₹ 1,174.25
₹ 1000
₹ 1000
₹ 1,277.60
₹ 1000
₹ 1000
₹ 1000
Amount ( ₹ / NCD) on Maturity for NCD Holders in Category III & IV
₹ 1000
₹ 1,182.95
₹ 1000
₹ 1000
₹ 1,295.35
₹ 1000
₹ 1000
₹ 1000

*The Company shall allocate and allot Series IV NCDs wherein the Applicants have not indicated the choice of the relevant NCD Series. Category III and IV of Investors in the proposed Issue who are also NCD(s)/bond(s) previously issued by the Company, and/ Its Subsidiaries as the case may be, and/or are equity shareholder(s) of Indiabulls Housing Finance Limited as the case may be (“Primary Holder(s)”) on the Deemed Date of Allotment and applying in Series I, Series III, Series IV, Series VI, Series VII and/or Series VIII shall be eligible for an additional incentive of 0.25% p.a. provided the NCDs issued under the proposed Issue are held by the investors on the relevant Record Date applicable for payment of respective coupons, in respect of Series I, Series III, Series IV, Series VI, Series VII, and Series VIII. Category III and IV of Investors in the proposed Issue who are also Primary Holder(s) on the Deemed Date of Allotment applying in Series II and/or V, the maturity amount at redemption along with the additional yield would be ₹1,188.40 per NCD and/or ₹1,304.30 per NCD respectively provided the NCDs issued under the proposed Issue are held by the investors on the relevant Record Date applicable for redemption in respect of Series II and/or Series V. The additional incentive will be maximum of 0.25% p.a. for Category III and IV Investors in the proposed Issue, who are also Primary Holder(s) on the deemed date of allotment. On any relevant Record Date, the Registrar and/or the Company shall determine the list of the Primary Holder(s) of this Issue and identify such Investor/ NCD Holders, (based on their DP identification and /or PAN and/or entries in the Register of NCD Holders) and make the requisite payment of additional incentive. The additional incentive will be given only on the NCDs allotted in this Issue i.e., to the Primary Holder(s). In case if any NCD is bought/acquired from the secondary market or from the open market, the additional incentive will not be paid on such bought/acquired NCD. In case the Primary Holder(s) sells/gifts/transfer any NCDs allotted in this Issue, the additional incentive will not be paid on such sold/gifted/transferred NCD except in the case where NCDs are transferred to the joint holder/nominee in case of death of the primary holder.

Financial Performance (Rs. Crores)

About the Company

Key Strengths

  • One of the largest pan-India HFCs with strong financial performance and credit ratings -IBHFL is one of the largest HFCs in India in terms of AUM. Its geographical reach within India across Tier I, Tier II, and Tier III cities enables it to target and grow its customer base.

    Indiabulls housing finance private limited offers loans to their target client base of salaried and self-employed individuals and MSMEs. IBHFL’s presence across India allows them to undertake loan processing, appraisal, and management of customer relationships in an efficient and cost-effective manner. Further, it’s a well-capitalized HFC with a strong financial track record.   
  • Access to diversified funding sources Over the years - IBHFL has developed a diversified funding base and has established strong relationships with lenders. Its lenders include PSUs and private banks, and other financial institutions. As of December 31, 2021, their consolidated borrowings (other than debt securities) were Rs 31,168.60 crores, consolidated debt securities were Rs 25,531.47 crores and consolidated subordinated liabilities were Rs 4,693.06 crore.

    Indiabulls housing finance private limited strong financial performance, capitalization levels, and credit ratings give considerable comfort to their lenders and enable them to borrow funds at competitive rates, thereby lowering their overall cost of borrowings. As of December 31, 2021, their company consolidated borrowings (i.e., the sum of debt securities, borrowings (other than debt securities), and subordinated liabilities) were through banks and financial institutions (50.50%), issuances of non-convertible debentures, and other debt instruments, including perpetual and subordinated debt (49.23%) and lease liability (0.27%). 
  • Prudent credit and collection policies IBHFL has separate policies tailored for retail loans and for loans to real estate developers. These policies are aimed at supporting the growth of the business by minimizing the risks associated with growth in the loan book. IBHFL also has an experienced collections team which, with their legal team, has enabled them to maintain high collection efficiencies through economic cycles. Their centralized credit analysis processes combined with a dedicated collections team help them maintain the quality and growth of total AUM. 
  • Effective use of technology - IBHFL’s e-Home Loans facility is a technological platform that gives their home loan customers access to paperless loans through their computers or mobile devices. With this technology, the entire process of loan origination (from loan application to approval) is managed through computers and mobile devices so there is no need for a branch visit. 
  • Expertise in Providing Loans to Self-Employed Individuals and MSMEs - IBHFL primarily provides loans against property to self-employed individuals, proprietorships, and MSMEs and corporates. These loans are secured against the cash-flow of businesses and through mortgages of, among others, business premises and self-occupied residential properties of customers. IBHFL has over 14 years of experience with loans against property (“LAP”), with demonstrated portfolio performance across business cycles including the global financial crisis, demonetization, GST transition as well as the liquidity squeeze of the last three years.  
  • Experienced Board of Directors and Senior Management Team - IBHFL’s Board of Directors comprises a diversified mix of professionals, who have experience and expertise in the fields of banking and regulatory affairs, business, legal affairs, and taxation, among others. A number of senior management team members have been with the company since the commencement of the operations.  

Credit Risks

  • Average asset quality: 

    The asset quality has witnessed some stress over the past few quarters with gross non-performing asset (GNPA)and net non-performing asset (NNPA)increasing to 2.66% and1.59%respectively, as of March 31, 2021. The said ratios deteriorated mainly on account of high slippages in the non-housing loan book and shrinkage in the asset base. However, BHFL managed to restrict asset quality from further deterioration with the reduction in slippages to NPA and maintaining healthy collection efficiency levels as of Sep30, 2021.GNPA and NNPA of the Company stood at 2.69% and 1.53%, respectively as of Sep 30, 2021. The management’s continuous focus is to scaled own its corporate loan book which is more vulnerable to the real estate sector risk, contributing~14%of the total AUM. Further, BWR continues to derive comfort from the credit appraisal system, the company’s risk management policies, its focus on reducing exposure through refinance and prepayments, and its demonstrated ability to recover dues from borrowers.  
  • Subdued profitability levels:

    The Company’s profitability levels were impacted due to falling income levels on the back of shrinkage of the loan book, high provisioning due to the impact of COVID-19 pandemic, and falling of NIM due to selling down of high-yielding developer loan portfolio coupled with high credit costs as on Sep30,2021. IBHFL reported PAT of Rs.568.03 Crores (ROA & ROE of 1.25 % & 7.15%, respectively) as of Sep 30,2021 compared to Rs.596Crs (ROA &ROEof1.26%&7.09%, respectively) as of Sep 30,2020. BWR believes that its profitability levels are expected to remain subdued in the current financial year owing to restricted AUM growth along with the high cost of borrowings. The ability of IBHFL to scale up its retail loan book under the new business model and raise funds at competitive rates to improve its profitability levels remains a key monitorable.  
About the Company

How to invest in Indiabulls Housing Finance Limited March-April 2022 NCD IPO?

Why choose Bonds India?

Bonds India is an online platform for fixed-income securities such as IPOs, bonds, 54EC bonds and fixed deposits. With a cumulative pedigree of 50+ years in the bond market, we aim to democratize the market for common investors by stationing detailed insights, expert advice, and keeping a close watch on the market sentiment. Bonds India brings up-to-date information when IPOs go live, fixed deposits with higher interests, and bonds with competitive price before anyone else.

Bonds India ditches the traditional ways of investing by offering a blockchain-based platform for investors that ensures instant online settlements and reduces counter-party risks. Choose Bonds India for its sleek interface, fail-safe communication and step-by-step guide to ensure a well-placed bid. You can apply for Indiabulls Housing Finance NCD IPO on BondsIndia website.

Place you bid in three simple steps

Key in Basic Details > Choose the IPO Series > Place the bid

How to invest in Indiabulls Housing Finance Limited NCD IPO?

Application process on Bonds India platform is simple and seamless.
  • Click on Apply Now in Indiabulls Housing Finance NCD IPO Page.

  • Fill in the Application form with the basic details such as Name, email address, mobile number, Pan details, bank and demat details).

  • Then, confirm the quantity and price and select payment method.

  • That’s all folks bidding complete!

Reach out to on info@bondsindia.com for more questions. Thank you for tuning in with Bonds India.
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