ncd Past few months have witnessed fluryy of activity in the Public issue of Non Convertible Debentures (NCD) by reputed companies.  The trend is led by NBFC and Housing Finance companies who desire to bring down their borrowing from banks and in the process also decrease their average cost of funds. Low interest rates offered by Banks and Expectation of lowering of interest rates have attracted investors to these NCD issues.  Public Issue  of NCDs in recent past and the response are indicated below:
Rs. In Crore
Slno NCD Issue Rating Maximum coupon rate Base Issue Size Issue Size With Green Shoe Date of Issue Remarks
1 M&M Financial Services (MMFSL) AAA 9% 250 1000 25-05-2016 Subscribed day 1
2 Edelweiss Housing Finance AA 10% 250 500 08-07-2016 Subscribed  day 1
3 Dewan Housing Finance Ltd (DHFL) Tier 1 AAA 9.30% 1000 4000 03-08-2016 Subscribed day 1
4 Dewan Housing Finance Ltd (DHFL) Tier 2 AAA 9.25% 2000 10000 29-08-2016 Subscribed day 1
5 SREI Infra AA+ (BWR) 10% 250 1000 07-09-2016 Open for long time
6 India Bull Housing Finance AAA 9.15% 3500 7000 15-09-2016 Subscribed day 1
Due to sizable float in recent time, some of  these NCDs are available at reasonable due to excess supply.  These are summarised below:
Name of NCD MMFSL EHFL DHFL Tier I DHFL Tier II
Coupon Rate 9 10 9.3 9.25
No. of years 10 10 10 7
Interest Frequency Annual Annual Annual Annual
Rating AAA AA AAA AAA
FV 1000 1000 1000 1000
FV  with accrued interest 1026.91 1018.1 1009.67 1003.52
LTP ( Last Traded Price) 1043 1029 1,004.00 996.00
Last Traded Date 23-09-2016 23-09-2016 23-09-2016 23-09-2016
YTM 8.59 9.71 9.26 9.30
ISIN INE774D08MA6 INE530L07228 INE202B07HV0 INE202B07IO3
NSE  Code EHFLNCD N6 DHFL NC DHFL NP
BSE Code 935752 935788 935814 935814
Security  ID 9MMFSL26 10EHFL26 930DHFL26B 925DHFL23B
Issue Dt 06-Jun-16 19-07-2016 16-08-2016 09-09-2016
interest due date 06-Jun-17 19-07-2017 16-08-2017 09-09-2017
Redemption  date 06-Jun-26 19-07-2026 16-08-2026 09-09-2023
MMFSL(Mahindra & Mahindra Finance Ltd.) NCDs, which are AAA  have been witnessing good demand and are ruling at YTM of just 8.59. This shows the confidence of investors enjoyed by the company. EHFL (AA rated) and DHFL 9.3% & 9.25% NCD are available at reasonable YTM* of 9.71%, 9,26% and 9.3% respectively.

*YTM i.e. Yield to Maturity for a bond is the total return, interest plus capital gain, obtained from a bond held till its maturity. It is expressed as a percentage and tells an investor what his return on investment will be if he purchases the bond and holds on to it until the redemption of the bond.

 With several more NCD issues and declining interest rates, Debt market is set to witness more activity and attract attention of investors.