9.7% interest rate: This debt instrument beats all high-return fixed deposits
Motilal Oswal Financial Services has launched its maiden public issue of non-convertible debentures (NCDs) worth Rs 1,000 crore, comprising a base issue of Rs 500 crore and a green-shoe option of Rs 500 crore to retain oversubscription.
The debt issue will be available for subscription from April 23-May 7, 2024. The NCDs will be listed on BSE and NSE.
The NCDs will attract a coupon rate ranging from 8.85% to 9.70% based on the series investors opt. The NCDs will have tenors ranging from 24 months to 120 months. The company will pay interest on monthly, annually or cumulative basis. Of the issue size, 10% will go to institutional investors, 10% to non-institutional investors, 40% to HNIs and 40% to retail investors. The allotment will be finalized on “First Come – First Served” basis.
In the Series 5 category of NCDs, which has a tenure of 60 months or 5 years, the debt instrument will carry a coupon rate of 8.97%, and effective yield would be 9.35%.
A coupon rate refers to declared interest rate payable each year and yield means the actual return an investor gets from the debt instrument for a year.
Also Read: Up to 9.10% Interest Rate on Recurring Deposits, 8.65% on Fixed Deposits: This NBFC hikes rates on digital-only RDs, FDs
The company will use at least 75% of proceeds from NCDs for meeting working capital requirements and repayment of existing liabilities. Another 25% will be utlised for general corporate purposes.
The NCD issue is rated CRISIL AA/Stable by CRISIL Ratings Ltd and IND AA/Stable by India Ratings and Research.
Debt instruments bearning these ratings are considered to have high degree of safety in terms of timely servicing of financial obligations.
Note: This rating is not a recommendation for
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