Edelweiss Financial Services Limited NCD IPO – January 2023, should you invest?

High Yield | AA-/Negative Rated | Minimum Investment: 10k Only 

Bond overview 

Edelweiss Financial Services Limited is issuing the Non-Convertible Debentures. These NCDs are AA-/Negative rated by CRISIL and AA-/Negative by ACUITE. The NCDs are being issued in ten series: coupon ranges from 9% to 10.46% p.a. and different tenures of 2 years, 3 years, 5 years, and 10 years. The NCDs are secured and redeemable in nature. 

Coupon rates and effective yield for each of the series 

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Allocation Ratio

The allocation ratio is prepared based on norms laid down by SEBI. Before announcing the allocation ratio, the same has to be approved by SEBI.  Once the IPO subscription closes, applications will be divided into different categories. The category-wise allocation ratio is always decided and declared during the launch of the particular IPO. Considering the Allocation Ratio, units will be assigned to applicants. Refer to the chart to know the application ratio for EFSL NCD-IPO. 

Investment Process for EFSL NCD IPO

You can invest in IPOs via GoldenPi in 3 easy steps.

If the investment amount is less than & up to 10 lakhs, retail investors can apply for an IPO online.

If the investment amount is more than 10 Lakhs.

Financial Overview

Snapshot stating the Revenue, Expenses, EBIT, Net Worth and PAT (In crores)

Cash flow for last 5 years (In crores)

Cash flow refers to the movement of cash in and out of the business at a specific point in time. It represents the net balance of the cash movement.

• • *Cash flow from operating activities reflects the amount a company generates through its product of services.
  • **Cash flow from investing activities reflects cash generated and spent relating to investing activities, like purchase of assets, sales of securities etc.
  • ***Cash flow from financing activities gives an insight into the financial stability of a company to its investors. It reflects the net flows of cash that are used to fund the company.

Ratio Analysis

To get better returns than Bank FDs, invest in NCD-IPOs online. 

Issue analysis

Pros 

• These NCDs are secured by the assets of the company providing an additional layer of protection to your investment. 
• These are secured securities.
• The issuer is offering high coupon rates, when compared with FD rates.

Cons

• Macroeconomic conditions such as COVID have negatively impacted the company. However, these conditions are gradually improving. 
• The company is expected to face pressure as asset quality and profitability deteriorate.

About EFSL

First-generation business owners founded Edelweiss Financial Services Limited (EFSL), the parent company of the Edelweiss Group of enterprises, in 1995 to provide investment banking services, especially to technology companies. The business is headquartered in Mumbai, India. Rashesh Shah and Venkat Ramaswamy jointly founded it.

Business Verticals: 

1. NBFC
2. Housing Finance
3. Asset Management
4. Asset Reconstruction
5. Insurance
6. Wealth Management

Quick walk through on Financials details for 2023

• Net Worth- Rs 8363 Cr
• Current Ratio- 2.87
• Customer Assets- Rs 359300 Cr
• Liquidity- Rs 5250 Cr

Strengths

• Balanced Capitalisation-Capital raised from global investors, and businesses.
• A diversified player with a variety of financial services and a track record of developing strong competitive positions across industries

Weakness

• Low Profitability.
• Negative Cash flow

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About GoldenPi Expert

With over 15 years of experience across fixed income and debt markets, he brings deep domain expertise along with a strong focus on investor education and transparency. An alumnus of IIT Kharagpur and IIM Calcutta, his views are personal and should not be considered investment advice.

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