High Yield | A Positive Rated | Minimum Investment: 10k Only
Bond overview
Vivriti Capital Limited is issuing the Non-Convertible Debentures. These NCDs are rated A; Positive by CARE and A (Stable) by ICRA. The NCDs are being issued in five series: coupon ranges from 9.57% to 10.5% p.a. and different tenures of 18 months, and 24 months . The NCDs are secured and redeemable in nature.
Coupon rates and effective yield for each of the series
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 Vivriti Capital Limited NCD-IPO.
Investment Process for Vivriti Capital Limited NCD IPO
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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.
Issue analysis
Pros
- These NCDs are secured by the company providing an additional layer of protection to your investment.
- 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.
Financial Overview
Snapshot stating the Revenue, PAT and 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.
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- *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
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About Vivriti Capital Limited
VCPL is a systemically important non-banking financial business that does not accept deposits (NBFC-ND-SI). VCPL, founded in June 2017 by Mr. Vineet Sukumar and Mr. Gaurav Kumar, offers a wide range of debt financing solutions to NBFCs and other businesses, including loans, working capital finance, and trade finance. It has also begun to extend its retail presence through various co-lending relationships with other NBFCs.
VCPL owns a stake in two group companies: VAM and CAPL. VAM handles alternative investment funds (AIFs) and is a 67% subsidiary (on a diluted basis).
Quick walk through on Financials details for 2023
Strengths
- Since its inception in FY2018, VCPL’s AUM has increased by 50% to Rs. 5,836 crore as of March 2023, having grown by 50% in FY2023.
- Regular capital infusions support the capitalisation profile.
- VCPL’s net profitability increased to 2.2% in FY2023 from 1.9% (2.0%, adjusted for the impact of capital raised in March 2022) in FY2022 (1.0% in FY2020), primarily due to margin improvement and low provision and credit costs.
Weakness
- Limited operational track record and moderate seasoning of a substantial percentage of the loan book.
- Moderate but improving profitability, while fund costs remain higher than peers.
- Exposure to riskier asset classes, which pose asset quality risks, as well as primarily enterprise exposures with concentration risk.
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