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Credit Access Ncds
Piyush Prajapati 10 Aug, 2023

Credit Access NCDs: A Golden Investment Opportunity

Before we delve into the details of the NCDs, it's important to get acquainted with the issuer. Credit Access Grameen Limited stands as a notable Indian micro-finance institution with its headquarters in Bengaluru. Its core mission revolves around extending joint liability group loans and micro-loans, with a primary emphasis on empowering women customers in the rural corners of India. As endorsed by the MicroFinance Institutions Network in India, CA Grameen secured its position as the country's largest NBFC-MFI based on the gross loan portfolio figures as of March 2022.

Issuer's Focus and Opportunity

Credit Access Grameen Limited primarily serves women customers in rural India, providing them with essential financial support. Their focus segments are women with an annual household income of up to Rs 300,000, as per the new microfinance regulations announced by RBI in March 2022. The company specializes in offering income generation loans, family welfare loans, home improvement loans, and emergency loans to their existing customers .

CA Grameen's promoter, Credit Access India N.V., is a multinational company specializing in micro and small enterprise financing. The promoter has a history of injecting capital into CA Grameen and facilitates access to potential fundraising avenues within the debt capital markets.

Why Consider Credit Access NCDs in Your Investment Portfolio

  • 1. Solid Credit Rating : The NCDs are rated "IND AA-/Stable" by India Ratings & Research Private Limited, indicating a strong credit profile.
  • 2. Attractive Returns : With coupon rates ranging from 9.10% to 9.70%, and effective yields from 9.48% to 10.13%, these NCDs offer competitive returns compared to traditional fixed-income investments.
  • 3. Diverse Tenors : You can choose from various tenors (ranging from 24 to 60 months) to align your investment with your financial goals.
  • 4. Flexible Interest Payment : Whether you prefer monthly interest payments or cumulative interest, Credit Access NCDs cater to both options.
  • 5. Listed on BSE : The NCDs will be listed on BSE, providing liquidity and ease of trading.

Credit Access NCD Investment Opportunity

Now, let's take a closer look at the investment opportunity presented by Credit Access Grameen Limited through its NCD issue.

NCD Issue Details

Aspect Details
Issuer Credit Access Grameen Limited
Base Issue Size: Rs. 400 Crores Base Issue Size: Rs. 400 Crores
Green Shoe Option: Rs. 600 Crores
Total Aggregated Issue: Rs. 1000 Crores
Issue Opening Date August 24, 2023
Issue Closing Date September 06, 2023
Face Value Rs. 1,000 per NCD
Minimum Application Rs. 10,000 (10 NCDs), collectively across all Options
Listing The NCDs will be listed on BSE within 6 working days from the respective Tranche Issue Closing Date.
Issuance Mode Dematerialized form
Credit Rating IND AA-/Stable by India Ratings & Research Private Limited
Basis of Allotment First come, first serve
Allocation Ratio QIB (Qualified Institutional Buyers): 25%
Corporate: 30%
HNI (High Net Worth Individuals): 20%
Retail Individual: 25%

Credit Access NCD Series Details

Now, let's examine the various NCD series and their corresponding features.

Series Frequency of Interest Payment Tenor Coupon (% per annum) Effective Yield (% per annum) Redemption Amount (₹/NCD) on Maturity
I Monthly 24 months 9.10% 9.48% Rs. 1,000
II Cumulative 24 months 9.25% 9.48% Rs. 1,198.82
III Monthly 33 months 9.40% 9.64% Rs. 1,000
IV* Cumulative 33 months 9.70% 9.64% Rs. 1,288.12
V Monthly 50 months 9.40% 9.81% Rs. 1,000
VI Cumulative 50 months 9.40% 9.81% Rs. 1,477.11
VII Monthly 60 months 10.13% 10.13% Rs. 1,000
VIII Cumulative 60 months 10.13% 10.13% Rs. 1,621.19

* Series IV offers a higher coupon rate but at the expense of cumulative interest payments.

Understanding the Series

• Series I, III, V, and VII offer monthly interest payments, providing investors with regular income streams

• Investors can choose the series that aligns best with their financial goals and preferences.

Investment Benefits
  • 1. Attractive Yields : The NCDs offer competitive coupon rates, with effective yields ranging from 9.48% to 10.13% per annum, depending on the series chosen.
  • 2. Diversity of Options : With eight series to choose from, investors have the flexibility to tailor their investments to suit their financial objectives.
  • 3. Monthly Income : Series I, III, V, and VII provide monthly interest payments, making them ideal for those seeking regular income.
  • 4. Safety and Credibility : CA Grameen holds a credit rating of "IND AA-/Stable" by India Ratings & Research Private Limited, indicating a strong level of creditworthiness.
How to Invest in Credit Access NCDs

To invest in Credit Access NCDs, follow these simple steps :

  • 1. Check Eligibility : Ensure you meet the eligibility criteria, including the minimum application amount.
  • 2. Demat Account : If you don't have one already, open a demat account to hold your NCDs in electronic form.
  • 3. Apply : Submit your application during the specified period between August 24, 2023, and September 6, 2023.
  • 4. Allotment : Wait for the basis of allotment to be announced. Allotment is on a first-come-first-served basis.
  • 5. Trading : Once allotted, you can trade these NCDs on the BSE after listing.
Conclusion

The Credit Access NCD issue presents an exciting investment opportunity for those looking to diversify their portfolio and earn attractive returns. With its strong credit rating and a variety of series to choose from, these NCDs cater to a wide range of investor preferences. Whether you seek monthly income or a cumulative growth of your investment, Credit Access NCDs offer both security and potential for substantial returns.

Investors are advised to carefully assess their investment goals and risk tolerance before making an investment decision. Remember that NCDs, like all investments, carry some level of risk, and it's essential to consult with a financial advisor or expert for personalized guidance.

Don't miss out on this chance to invest in a promising opportunity – the Credit Access NCD issue. Begin your journey to secure your financial future today.

Disclaimer

Investments are subject to risks. Investors are advised to carefully read the offer-related documents and seek professional advice before making any investment decisions.

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