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Home >Money >Personal Finance >Edelweiss NCDs offer up to 9.95%, should you subscribe?

A 200 crore issue of Non Convertible Debentures (NCDs) by Edelweiss Financial Services Ltd opens today and will end on 15th Jan. NCDs are bonds with a fixed maturity date and interest rate.

The bonds are offering an effective yield (cumulative) of 9.95% per annum for 120 months tenure, 9.35% per annum for 36 months tenure and up to 9.80% per annum for 60 months tenure. Previous holders of bonds issued by the company or group companies including ECL Finance, Edelweiss Housing Finance, Edelweiss Retail Finance, Edelweiss Finance and Investments or shareholders of Edelweiss Financial Services will get another 0.20% per year.

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The issue will run from 23rd December to 15th Jan 2021, with an option of early closure. Care Ratings has rated the offering CARE A+; with stable outlook and Brickwork Ratings India Private has rated it as BWR AA-/Stable.

However experts have taken a cautious stance. "Though the outlook is stable, an A rating means there is credit risk. Refinancing loans is common currently because of the reduced interest rates but there is no advantage for 10 year investing over 3 years. Someone who understands credit risk, can park in for 3 years and for others it's an avoid," said Kirtan Shah, Chief Financial Planner at Sykes and Ray Equities (I) Ltd, a mutual fund distributor.

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