Piramal NCD 9% covered bonds: check if this investment option is for you

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Details of the NCD issuing company:

Piramal Capital & Housing Finance Limited is a 100% subsidiary of Piramal Enterprises Limited. The company offers real estate loans, real estate and financial services to businesses, individuals and businesses, etc.

When it comes to real estate finance, the company is expanding homeownership lending, housing finance, digital purchase finance as well as online personal loans.

Objective of the program:

Objective of the program:

Funds recovered through the issuance will be used for lending, financing and early repayment / repayment of interest and principal of existing borrowings (at least 75%). The funds will also be used for other general corporate purposes.

NCD Credit Rating:

NCD Credit Rating:

CARE has rated Piramal’s secure NCD with CARE AA (CWD) (On Credit Watch with Developing Implications) and ICRA (AA) with Outlook (Negative) by ICRA Ltd. This rating is lower than the highest rating of “AAA”. In addition, the negative outlook suggests that there may still be a further downgrade of the issue.

Financial: The company has ordered a loan book of Rs. 32,254 crore as well as a net NPA of 1.9% as of March 31, 2021. Home loans represent 3/4 of the company’s total loan portfolio, while non-real estate and retail loans make up the remainder. The company’s current RAC is well above regulatory requirements at 32.3%.

Coupon rate and payment frequency

Coupon rate and payment frequency

Option Mandate Interest Coupon
I 26 months Annual 8.35%
II 26 months Accumulation N / A
III 36 months Annual 8.50%
IV 60 months Annual 8.75%
V 120 months Annual 9.00%

How to apply for Piramal NCD?

Through the online and offline route, one can apply to Piramal NCD. You can do this through your Demat account. In addition, if you wish, you can download the form from the company’s website and fill in the required information, pay by check and submit it to the nearest collection center.

Taxation:

Taxation:

All interest received on these CRS will be taxed according to your tax base. In addition, the NCDs purchased at the time of issue and held until maturity (both at their nominal value) will have no capital gain and therefore no tax. In the event of reimbursement of NCDs after a one-year holding period, the LTCGT at the rate of 10% without indexation increased by 4% will apply.

Conclusion:

Conclusion:

NCDs are secure, which means that the company, in the event of a financial emergency, will first pay investors by liquidating its assets. Nonetheless, the recent takeover of DHFL may have an impact on the company’s loan portfolio as well as its capital adequacy ratio. All the more so in a regime of increasing interest, it is always preferable to reserve in such NTMs for a short duration. Also note that the ratings of these MNTs may see a rating revision with the evolution of the financial statements of the company. Thus, prudent investors who cannot afford an element of risk in their investment do not need to choose this product for a higher return. Additionally, the rating suggests that this CRS question is not for the risk averse class of investors.

BonRetours.in

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