JM Financial Products NCD With 8.3% Interest; Who Should Consider?

JM Financial Products Limited, the JM Financial Group's flagship NBFC, has announced the Tranche I public issuance of Secured NCDs with a face value of Rs 1,000 apiece. The fixed coupon rate is up to 8.3% each year, and the variable interest rate is based on a 91-day T-bill with a 3.15 percent spread.

NCD Tranche Details

The first issue of Tranche I will be released on September 23, 2021, and will close on October 14, 2021. The NCDs are proposed to be listed on BSE

The Tranche I Issue has four series, the first of which has a floating interest rate option and a tenor of 39 months. Series I has a floating interest rate based on the Financial Benchmarks India Pvt Ltd (FBIL) 3-month T-Bill rate plus a 3.15 percent margin. The coupon for Series I NCDs will be determined by the T-bill rate movement.

Furthermore, Series II, III, and IV provide fixed interest rate options with terms of 60 months (annual), 60 months (monthly), and 100 months (year). Series II, III, and III NCDs (fixed interest rate) have effective annual yields ranging from 8.19 percent to 8.30 percent. For Series II, III, and IV NCDs, the Tranche I Issue offers subscription options with coupon rates ranging from 7.91 percent to 8.30 percent each year (fixed interest rate).

NCD Tranche Details Series 1

 

Issuer	JM Financial Products Limited
Nature of Instrument	Secured Rated Listed Non-Convertible Debentures
Issue Open Date	September 23, 2021
Issue Close Date	October 14, 2021
Credit rating	AA/Stable rating- ICRA, Crisil Ratings
Fixed Coupon Rate	Up to 8.30% per annum
Tenor	39 months to 100 months*
Issue Size	Rs 1000 Crores
Issue Price	Rs 1,000 per NCD
Minimum Application	Rs 10,00

Credit ratings for these NCDs

ICRA and Crisil Ratings have given these NCDs an AA/Stable rating. This rating reflects a high level of security in terms of meeting financial obligations on schedule.

The money raised through this Tranche I Issue shall be utilized for onward lending, financing, and repayment / prepayment of interest and principal on the Company's borrowings (at least 75% ) as well as general corporate purposes (up to 25 percent ). The issue's main managers are Equirus Capital and JM Financial Limited.

Who Should Invest?

This issue is only accessible in Demat format. You can apply online or on the website of any broker where you have a Demat account. Financial Products by JM NCDs have a high yield and interest rate. Because banks are giving low-interest rates, investors may be enticed to invest in NCDs. ICRA and CRISIL Ratings have given these NCDs an AA/Stable rating, which is considered a good grade.

NCDs can be purchased by investors that are willing to take a moderate to high risk. These NCD bonds should be avoided by low-risk investors.

Investors with a higher risk appetite and a desire to lock in their assets at a higher rate of return can consider NBFC NCDs. For many institutional investors, this still makes sense, but for individuals, the market may provide a plethora of appealing and rewarding investment alternatives!