DHFL introduces CPI linked coupon rate option for its NCD issue

Dewan Housing Finance Corporation Limited (DHFL) will open public issue of secured redeemable Non-Convertible Debentures (NCD) on 3rd August. The face value of each is Rs. debenture is Rs 1,000.

The company for the first time has launched NCD with Consumer Price Index (CPI) linked coupon rate option. The tenor for this is three years and the floor rate on the interest rate is 8.90 percent and cap on the interest rate is 9.50 percent for all categories. The offering will be in the first come, first serve basis with more importance given to retail individual investors and High Net Worth Individuals (HNIs). Through these innovative floating instruments, the company is reaching out to retail investors.

There are 10 series for issue structure with options that range from 3, 5 and 10 years tenure with monthly, annual and cumulative payment options. DHFL’s CEO Harshil Mehta said, “With a pure retail prospective, NCDs are attractive when it comes to fixed deposits. Secondly, the concerns over safety even if the yields are high, are also taken care of. We are backed by triple AAA rating and an option of liquidity will be things that the investors will be concerned about. When you put all this together the NCDs look attract for the retail investors.”

The face value of the issue is aggregating up to Rs. 4,000 crore and the issue is scheduled to close on 16 th, August with an option of early closure.