Aditya Birla Finance Limited (ABFL) is a subsidiary of Aditya Birla Capital Limited and is a non-deposit-taking systemically important non-banking financial company (NBFC-NDSI) registered with the Reserve Bank of India (RBI).
On September 27, 2023, ABFL launched its first public issue of non-convertible debentures (NCDs) to raise up to ₹2,000 crore. The issue was subscribed 1.99 times on the last day of subscription, October 12, 2023.
The NCDs were issued in six series with different tenures and coupon rates:
The NCDs are rated “AAA/Stable” by India Ratings and ICRA, which indicates the highest degree of safety regarding the timely servicing of financial obligations and carry the lowest credit risk.
The NCDs are secured and redeemable in nature, and will be listed on the BSE and NSE.
Investment Strategy
The Aditya Birla Finance NCD IPO Sep 2023 offers attractive coupon rates with an AAA rating from India Rating and ICRA. It has also posted growing financial performance. Investors looking for a steady regular income may consider parking funds for the medium to long term.
Risks: Like any other investment, NCDs also carry certain risks. Some of the risks associated with NCDs include:
Interest rate risk: If interest rates rise, the value of existing NCDs may fall.
Credit risk: There is always a risk that the issuer of the NCD may default on its obligations.
Liquidity risk: NCDs may not be as liquid as other investments, such as stocks, and it may be difficult to sell them before maturity.
Investors should carefully consider their risk appetite and investment objectives before investing in NCDs.