This NBFC offers non convertible debentures with coupon rate upto 9.85%: Should you invest?

livemint.com:

360 One Prime has launched an issue of non-convertible debentures (NCDs). These are redeemable, non-convertible debentures and were launched on May 24 and will close on June 6, 2024.

The debt instruments are offering an interest rate of up to 9.85 per cent per annum and has a high credit rating of Crisil AA Stable.

The Crisil Ratings website states that the issuers with ‘AA’ rating are considered to have a high degree of safety regarding timely servicing of debt obligations. Debt exposures to such issuers carry very low credit risk. The rating below ‘AA’ is Crisil ‘A’ and the one above this is Crisil ‘AAA’. 

Also, a ‘stable’ outlook shows that the rating is likely to remain unchanged. 

Non-convertible debentures refer to fixed-income instruments, which are issued by entities in the form of a public issue and offer a high interest rate to investors, and provide a consistent flow of income.

These are corporate debt instruments and somewhat similar to bonds. Unlike bonds, however, they cannot be converted to equity shares.

Investors can opt for different tenures of investment which could be two years, 3 years, 5 years and 10 years.

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The coupon rate of these securities offered by 360 One Prime ranges between 8.86 per cent to 9.85 percent. The minimum application is for ₹10,000 and in multiples of ₹1,000.

The loan tenure is between 1.5 years to 10 years. And there are two options of frequency of interest payment: monthly and annual. The annual option carries slightly higher interest as compared to monthly option for the same tenure, as shown in the table below.

(Source: 360.one)

As one can examine in the table above, the highest