UGRO Capital Secured NCD Bonds would open for subscription on October 10, 2024. Firm is a non-deposit-taking, systemically vital NBFC agency registered with the RBI. It presents rates of interest as much as 10.4%. These NCD’s are issued in 3 completely different collection for 18, 24 and 30 months tenure. Curiosity is paid month-to-month. Must you spend money on UGRO Capital NCD Oct-2024 subject? What are the chance elements one ought to contemplate earlier than investing in such excessive threat NCDs?
About UGRO Capital Restricted
UGRO Capital Restricted is a non-deposit-taking, systemically vital NBFC agency registered with the RBI. It’s engaged within the lending enterprise and focuses on the MSME sector in India. Firm supplies loans to SMEs and MSMEs specializing in the healthcare, training, chemical substances, meals processing/FMCG, hospitality, electrical home equipment and elements, automotive equipment and light-weight engineering segments, and micro-enterprises segments.
Firm has a community of 164 branches is segregated into two verticals: prime branches, positioned in metro, tier 1, and tier 2 cities with buyer turnovers starting from ?1 crore to ?15 crores, and Micro branches, based mostly in tier 3 to tier 6 cities with buyer turnovers of lower than Rs 1 crore. This helps the corporate’s presence in PAN India.
UGRO Capital NCD – Oct-2024 Challenge Particulars
| Challenge Open | 10-Oct-24 |
| Challenge Closes | 23-Oct-24 |
| Issuing Safety Identify | UGRO Capital Restricted |
| Safety Kind | Secured, Redeemable and Non-Convertible NCDs |
| Challenge Dimension (Base) | Rs 100 Crores |
| Challenge Dimension (Choice to retain over subscription) | Rs 100 Crores |
| Complete subject dimension | Rs 200 Crores |
| Challenge worth | Rs 1,000 per bond |
| Face worth | Rs 1,000 per bond |
| Sequence | I to III |
| Minimal Lot dimension | 10 bonds and 1 bond there after |
| Tenure | 18, 24 and 30 months |
| Curiosity Cost frequency | Month-to-month |
| Itemizing on | Inside 6 working days on BSE/NSE |
| Lead Supervisor | Tipsons Consultancy Providers Non-public Restricted |
| Debenture Trustee/s | Mitcon Credentia Trusteeship Providers Restricted |
What are UGRO Capital NCD Curiosity Charges?
| Sequence | Sequence 1 | Sequence 2 | Sequence 3 |
|---|---|---|---|
| Frequency of Curiosity Cost | Month-to-month | Month-to-month | Month-to-month |
| Tenure (months) | 18 | 24 | 30 |
| Coupon (% per Annum) | 10.15% | 10.25% | 10.40% |
| Efficient Yield (% per Annum) | 10.64% | 10.75% | 10.91% |
| Quantity on Maturity (In Rs.) | 1,000 | 1,000 | 1,000 |
What are the UGRO Capital NCD rankings?
These secured NCD’s are rated as IND A+/Steady by India Rankings & Analysis Non-public Restricted which point out that such securities with this score are thought of to have sufficient diploma of security relating to well timed servicing of monetary obligations. Such securities carry low credit score threat.
Firm Financials
| Interval Ended | 31-Mar-22 | 31-Mar-23 | 31-Mar-24 |
|---|---|---|---|
| Property | 2,854.23 | 4,305.59 | 6,279.98 |
| Income | 313.42 | 683.76 | 1,081.68 |
| Revenue After Tax | 14.55 | 39.78 | 119.34 |
Why to spend money on UGRO Capital NCD?
- These NCDs supply excessive rates of interest, which vary between 10.15% to 10.4% and yield between 10.64% to 10.91%.
- These are secured NCDs. If the corporate will get shut down or get into monetary disaster for some cause, NCD traders would get choice in compensation of capital together with curiosity as these backed up by property of the corporate. Therefore, it’s protected to spend money on secured NCDs. Nevertheless the chance will not be 100% eradicated.
- Firm margins are enhancing 12 months on 12 months in the previous few years.
Why to not spend money on UGRO Capital NCD?
Listed below are the chance elements of investing in these non-convertible debenture bonds.
- Whereas these are secured NCD, in case firm wind-up for some cause, there isn’t any assure that NCD traders would get 100% of their principal quantity and curiosity. For example, earlier DHFL got here with secured NCDs. They went bankrupt and NCD traders but to obtain their full principal quantity. Funding in NBFC NCDs is riskier.
- Excessive ranges of buyer defaults or delays in compensation of loans might adversely have an effect on its enterprise.
- Firm could not have the ability to get well, on a well timed foundation or in any respect, the total worth of collateral or quantities that are ample to cowl the excellent quantities due below defaulted loans or the worth of collateral could lower, which might adversely have an effect on the outcomes of operations, money flows and monetary situation.
- Its AUM contains of unsecured loans. Firm’s incapacity to get well the quantities due from prospects in reference to such loans in a well timed method might adversely have an effect on the enterprise and income.
- Firm monetary efficiency is especially susceptible to rate of interest volatility.
- Its enterprise operations contain transactions with debtors with restricted entry to credit score whose threat profile is comparatively excessive threat. Any default from such prospects might adversely have an effect on its enterprise.
- The enterprise requires substantial capital, and any disruption in funding sources would have a fabric antagonistic impact on firm liquidity and monetary situation.
- Discuss with the UGRO Capital NCD Oct-24 Prospectus for full threat elements.
Must you spend money on UGRO Capital NCD – Oct-2024 subject?
- UGRO Capital presents secured NCD now. These NCDs supply excessive rate of interest as much as 10.4%. These NCDs have good credit standing of IND A+/Steady by India Rankings & Analysis Non-public Restricted.
- On the opposite facet, one ought to perceive the dangers concerned in investing in NCD bonds of NBFC corporations. Previously, NBFC corporations has been delaying/defaulted the cost of curiosity and compensation of capital.
Excessive-risk traders can spend money on these NCD bonds after understanding all these threat elements.
Suresh KP is the Founding father of Myinvestmentideas. He’s NISM Licensed – Funding Adviser and NISM Licensed – Analysis Analyst. He has been analyzing monetary markets within the final 20 years.He might be reached at suresh@myinvestmentideas.com
