Indian Bulls Housing Finance Bonds are trading at high yields in the market despite its AA rating by rating agencies. In this context, the market is viewing the issuer as high risk.
The current traded levels of IBHF bonds are given in table below.
Date | ISIN | Coupon (%) | Yield (%) | Maturity |
06-Sep-21 | INE148I08215 | 9.3000 | 11.5 | 29-Jun-26 |
02-Sep-21 | INE148I08215 | 9.3000 | 9.37 | 29-Jun-26 |
02-Sep-21 | INE148I08207 | 10.0000 | 12.6 | 03-Aug-25 |
01-Sep-21 | INE148I07241 | 10.0000 | 9.14 | 19-Mar-23 |
01-Sep-21 | INE148I08215 | 9.3000 | 9.51 | 29-Jun-26 |
31-Aug-21 | INE148I08215 | 9.3000 | 9.37 | 29-Jun-26 |
30-Aug-21 | INE148I08215 | 9.3000 | 9.37 | 29-Jun-26 |
Company Profile
Indiabulls Housing Finance Limited (IBHFL), was started in 2005 and is registered with National Housing Bank. In 2013, the parent company Indiabulls Financial Services Limited merged with Indiabulls Housing Finance Limited. The company provides mortgage loans, LRD, and construction finance with a prime focus on the mortgage and home finance business.
Credit Rating- In Feb 2020, Indiabulls Housing Finance Ltd has been downgraded to AA from AA+ by both ICRA and CRISIL. The downgrade has been caused by continued challenges faced by IBHFL in mobilizing long-term resources and the weakening of its market position as a leading financier to the housing sector.
Parameter (in billion) | FY19 | FY20 | FY21 | Q1FY22 |
Interest income | 165.69 | 128.64 | 98.33 | 22.97 |
Profit after tax | 40.85 | 22.00 | 12.02 | 2.82 |
Assets under management | 1205.25 | 930.21 | 807.41 | 792.13 |
Total assets | 1310.68 | 1028.72 | 932.38 | 871.70 |
% CRAR | 20.83 | 22.23 | 24.8 |
|
% Gross NPA | 0.88 | 1.84 | 2.66 | 2.86 |
% Net NPA | 0.69 | 1.24 | 1.59 | 1.55 |
Indiabull Housing Finance public debt issue
Issue Open | Sep 6, 2021 - Sep 20, 2021 |
Security Type | Secured NCDs and/or Unsecured NCDs |
Issue Size (Base) | Rs 2 billion |
Issue Size (Shelf) | Rs 8 billion |
Issue Price | Rs 1000 per NCD |
Face Value | Rs 1000 each NCD |
Minimum Lot size | 10 NCD |
Market Lot | 1 NCD |
Listing At | BSE, NSE |
Credit Rating | CRISIL AA/Stable and BWR AA+ /Negative |
Tenor | 24, 36, 60 and 87 Months |
| Series 1 | Series 2 | Series 3 | Series 4 | Series 5 | Series 6 | Series 7 | Series 8 | Series 9 | Series 10 |
Tenor | 24 Months | 24 Months | 24 Months | 36 Months | 36 Months | 36 Months | 60 Months | 60 Months | 87 Months | 87 Months |
Type of Instrument | Secured NCDs | Unsecured NCDs | ||||||||
Frequency of Interest Payment | Annual | Cumulative | Monthly | Annual | Cumulative | Monthly | Annual | Monthly | Annual | Monthly |
Coupon Rate (Retail) | 8.75% | NA | 8.42% | 9.00% | NA | 8.66% | 9.25% | 8.89% | 9.75% | 9.35% |
Effective Yield (%) | 8.75% | 8.75% | 8.75% | 9.00% | 9.00% | 9.00% | 9.25% | 9.25% | 9.75% | 9.75% |
Amount on Maturity | Rs 1,000.00 | Rs 1,182.70 | Rs 1,000.00 | Rs 1,000.00 | Rs 1,295.35 | Rs 1,000.00 | Rs 1,000.00 | Rs 1,000.00 | Rs 1,000.00 | Rs 1,000.00 |
Weak Profitability- During FY21, IBHFL’s interest income came down by 23.56% on yearly basis to Rs 98.33 billion from Rs 128.64 billion in FY20. In the same line, net profit came down by 45% during FY21 on yearly basis. Its asset under management (AUM) also declined by 13% during FY21 on yearly basis.
Weakening Asset Quality-As of 31st March 2021, IBHFL’s gross NPA deteriorated to 2.66% from 1.84% as of 31st March 2021. Consequently, net NPA stood at 1.59% as of 31st March 2021. GNPA and NNPA further deteriorated to 2.86% and 1.55% as of 30th June 2021.
Challenges in resource mobilization from different sources – The operating environment has been challenging over the past five quarters with the prolonged liquidity squeeze and the risk averseness of investors towards wholesale-oriented NBFCs and HFCs, resulting in challenges in fundraising. The ongoing legal proceedings have heightened the risk-averse sentiments of lenders/investors, thereby impacting IBHFL’s financial flexibility. This will affect its profitability and growth prospects of the company going ahead.