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Fixed Income Wealthy
Fixed Income Wealthy
01
Market Outlook-Fixed Income
As on 18-Aug-2023
YTM Price per unit
10.5% 10,18,847.41
9.5% 10,54,597.02
9.0% 10,73,129.22
How to evaluate credit risk
10.75% Muthoot Microfin 2026
Issuer Muthoot Microfin Ltd About the company
• Muthoot Microfin Ltd (MML) is a subsidiary of the Muthoot FinCorp, which is the 3rd largest gold
Issue Date 6 Jun 2023 loan based NBFC in India. MML is strategically important and is the second largest, in terms of
AUM, for the group, after gold loans. In addition, MML provides diversity to the product profile.
Face Value ₹1,00,000
Given majority ownership, shared name, common branding and corporate identity, CRISIL Ratings
Coupon 11% believes Muthoot Fincorp Ltd has a strong moral obligation to support MML.
Interest Pay-out Last day of every month
• Products of Muthoot Microfin are categorized into 4 aspects:
Maturity 6 Jun 2026 Livelihood Solutions – Income generating loan & Dairy loan
Life Betterment Solution – Education loan, Gold loan, Mobile phone loan, Solar lighting loan
Tenure 36 Months Health & Hygiene – Water and sanitation loan
Yield 9.8% Value Added Services – extra services that provide helpful solutions to general concern, for
example Tele-medicine & E-clinic, coverage for damaged dwellings
Min Quantum ₹2 Lac Multiple
Rating A+/Stable by CRISIL • MML is planning massive expansion in the northern states with a projected opening of 500 more
branches in the next 3 years
Type Secured
Additional information
There was a rating upgrade by CRISIL in November
2022 on the long term bank facilities and debt
programs from A/Stable to A+/Stable
As on April 2023
10.75% Muthoot Microfin 2026
• The company has a healthy Net Interest Margin of 10.72% and ROE 11.06% as of March 2023
• Even though the company reported a PAT of only ₹7 Crores during FY 2021, the pre-provisioning operating profit (PPOP) was ₹138.5 Crores , which
improved to 47 crore in FY 2022 due to business expansion and economic revival. Pre-provisioning operating profit was ₹ 159 crore for FY 2022.
• MML has an adequate capitalization which was supported by the infusion of $60 million in equity funding by Greater Pacific Capital (London based PE
firm) in FY 22-23 and FY21-22
• The company has a networth of 1,625.85 Crores as on March 2023
• The company had cash and liquid investments of ₹1144.6 Crores as on December 2022 as against debt obligation of ₹849.6 Crores over the three
months until March 2023. Liquidity is also supported by securitization lines of ₹199 Crores as on December 2022
9% FedBank Financial 2030
Terms of the Issuance About Fed Bank Financial Services
A retail focused NBFC operating in Gold Loans, Loan Against Property (LAP), Home Loans and Business
Issuer FedBank Financial Services Ltd Loans.
Issue Date 27th May 2023 Promoter Holdings AUM
Face Value ₹1,00,000 Asset Break Up (Dec'22) Amount(Cr) %Age Yield
Small Ticket Loan Against Property 1,499 19.06% 17.26%
Coupon 9% Medium Ticket Loan Agianst Property 1,992 25.33% 11.47%
Housing Loans 488 6.20% 14.00%
Interest Pay-out Annually on 26th May every year Gold Loans 2,610 33.18% 15.63%
Unsecured Business Loans 1,276 16.22% 17.49%
Maturity 26th April 2030
Total 7,865 100.00% 15.09%
Tenure 6 years 11 months Key Financials
31-Mar-20 31-Mar-21 31-Mar-22
Yield 8.9%
AUM (Cr) 3,838 4,862 6,187
PAT (Cr) 3.91 6.17 10.35
Min Quantum ₹5 Lacs Multiple
Net-worth (Cr) 691 835 1,154
Rating AA/Stable by CARE Interest Coverage Ratio 1.37 1.33 1.51
Net Interest Margin 7.48% 8.00% 8.92%
Type Subordinate & unsecured Gross NPA 1.47% 1.04% 2.23%
Net NPA 1.08% 0.71% 1.75%
Capital Adequacy Ratio 17.89% 23.52% 23.04%
Why Fed Bank Financial Services?
1. Rating upgrade from AA- to AA by CARE Ratings in Dec’22, also its parent FBL is rated AA+ for its FDs
2. Strong support from promoters. FBL infused equity of ₹456 cr. and TrueNorth LLP infused equity of ₹375 cr in last 4 years
3. Gold Loan book is of 38%, LAP- 38.8%, hence atleast 76% of the loan book is in the form of collateralized lending
4. Cash and Liquid investments of ₹580 cr as on Oct’22 and Undrawn Bank Line of ₹595 cr as on Oct’22
Execution Process
Step 1: Select the NCD Step 2: Fill the Form Step 3: Fill the interest Form
Issuer/Name Face Value Coupon Rating Maturity Tenure (Yr) Client YTM
9.20% Edelweiss Financial Services 2026- Secured 1,000 9.2% Monthly AA- Crisil 21-Jul-26 2.77 10.00%
10.25 Navi Finserv 2025 (Secured) 1,000 10.25% Monthly A Crisil 18-Oct-25 2.02 9.80%
11.00% Muthoot Microfin Limited 2026 1,00,000 11% Monthly A+ Crisil 05-Jun-26 2.65 9.80%
10.30% Muthoot Capital Services Limited 2025 1,00,000 10.3% Monthly A+ Crisil 31-May-25 1.63 9.50%
9.95 U.P. POWER CORPORATION LIMITED 2028 10,00,000 9.95% Quarterly A+ Crisil 31-Mar-28 4.47 8.60%
9.95 U.P. POWER CORPORATION LIMITED 2026 10,00,000 9.95% Quarterly A+ Crisil 31-Mar-26 2.47 8.30%
8.42% IIFL Finance Ltd 2026 10,00,000 8.42% Monthly AA+ Crisil 14-Oct-26 3.01 8.30%
8.52% PNB Housing Finance Ltd 2028 1,00,000 8.52% Annual AA ICRA 06-Sep-28 4.90 7.80%
Fixed Deposit
What are Corporate Fixed Deposits?
Advantages:
1. Corporate Fixed Deposits offer higher interest rates than most
banks’ Fixed Deposits
2. Rated AAA/AA+/AA by leading rating agencies
3. Flexible tenures
Understanding FD Rate Card
What are Corporate Fixed Deposits?
Advantages:
1. Corporate Fixed Deposits offer higher interest rates than most
banks’ Fixed Deposits
2. Rated AAA/AA+/AA by leading rating agencies
3. Flexible tenures
Corporate Fixed Deposits- Bajaj Finserv
• Flexible tenure options of anywhere between 12 to 120 months and allows convenient withdrawals so you always
have access to your money
ICICI Home
FD Tenures (Months) Monthly Quarterly Annual Cumulative
12-24 6.8 6.85 7 7
24 -36 7.05 7.1 7.3 7.3
36 -48 7.15 7.2 7.4 7.4
48 -120 7.25 7.3 7.5 7.5
39 7.15 7.2 7.4 7.4
45 7.35 7.4 7.6 7.6
65 7.45 7.5 7.7 7.7
Corporate Fixed Deposits- Shriram Transport
• Shriram Transport Finance Company has the highest safety Rated "[ICRA]AA+ (Stable)" by ICRA and Rated "IND AA+/Stable" by
India Ratings and Research (Indicates a high degree of safety)
• With the wide availability of decentralized 1758 Branches and 831 rural centres across the country for personalized services.
STFC operates with 27218 dedicated employees.
• Proven track record for more than 40 years of timely and on track fixed deposit payment.
• Senior citizens (above 60 years) will be eligible for 0.25% additional Rate of Interest
Advantages:
1. Corporate Fixed Deposits offer higher interest rates than most
banks’ Fixed Deposits
2. Rated AAA/AA+/AA by leading rating agencies
3. Flexible tenures
Corporate Fixed Deposits- Bajaj Finserv
• Flexible tenure options of anywhere between 12 to 120 months and allows convenient withdrawals so you always
have access to your money
ICICI Home
FD Tenures (Months) Monthly Quarterly Annual Cumulative
12-24 6.8 6.85 7 7
24 -36 7.05 7.1 7.3 7.3
36 -48 7.15 7.2 7.4 7.4
48 -120 7.25 7.3 7.5 7.5
39 7.15 7.2 7.4 7.4
45 7.35 7.4 7.6 7.6
65 7.45 7.5 7.7 7.7
Corporate Fixed Deposits- Shriram Transport
• Shriram Transport Finance Company has the highest safety Rated "[ICRA]AA+ (Stable)" by ICRA and Rated "IND AA+/Stable" by
India Ratings and Research (Indicates a high degree of safety)
• With the wide availability of decentralized 1758 Branches and 831 rural centres across the country for personalized services.
STFC operates with 27218 dedicated employees.
• Proven track record for more than 40 years of timely and on track fixed deposit payment.
• Senior citizens (above 60 years) will be eligible for 0.25% additional Rate of Interest
Advantages:
1. Corporate Fixed Deposits offer higher interest rates than most
banks’ Fixed Deposits
2. Rated AAA/AA+/AA by leading rating agencies
3. Flexible tenures
Sovereign Gold Bonds
Product Features:
Sovereign Gold
1. Sovereign Gold Bonds (SGBs) are issued by Govt of India. Physical Gold Gold Funds/ETFs
Bonds
2. It pays 2.5% interest per annum. Tenor is 8 years with an
exit option after 5th year Gold ETFs/Funds track
the domestic prices of
3. Purchase price will be the current market price of 1 gram physical gold. These
gold, maturity value of one unit of SGB will be the market SGBs are tradable
Jewellery, Gold bars funds create a basket of
Definition security issued by
price of 1 gram of gold at the time of maturity or Gold coins gold bullion and are
Govt of India.
passive investment
4. Online applications will get a discount of INR 50 per gram instruments based on
gold prices
5. No Lock-in & Listed on Stock Exchanges.
6. Units are held in demat Interest 2.5% annual
NA NA
Payment interest payment
7. No Capital Gain Tax for Individuals on redemption.
Interests are taxable as per slab rate Gold ETFs can be sold in
SGBs can be sold in
the exchange anytime
Process: Liquidity Can be sold the secondary
and Golds funds can be
market
redeemed anytime
8. SGBs are issued multiple times in a year by Govt of India.
Reserve Bank of India will notify before the issuance. Theft, Loss due to Liquidity is low in
Risks Jewellers’ making the secondary
9. SGBs will be available only for specific time period, only charges market
during this period SGBs can be purchased
LTCG tax with indexation
10. Minimum – 1 gm & Maximum – 4 kgs per Financial Year Taxation GST while purchase
benefit
54EC Capital Gain Bonds
Long-term capital gain is the gain that is derived out of a sale of an asset (Land or Building) that has been held for
more than two years. You can invest the gain in certain specified bonds to claim tax exemption within 6 months of the
date of sale of the asset. 54EC bonds, or capital gains bonds, are one of the best way to save long-term capital gain tax
arising out of sale a capital asset.
Thank You
What are Corporate Fixed Deposits?
Advantages:
1. Corporate Fixed Deposits offer higher interest rates than most
banks’ Fixed Deposits
2. Rated AAA/AA+/AA by leading rating agencies
3. Flexible tenures
Sovereign Gold Bonds
Product Features:
Sovereign Gold
1. Sovereign Gold Bonds (SGBs) are issued by Govt of India. Physical Gold Gold Funds/ETFs
Bonds
2. It pays 2.5% interest per annum. Tenor is 8 years with an
exit option after 5th year Gold ETFs/Funds track
the domestic prices of
3. Purchase price will be the current market price of 1 gram physical gold. These
gold, maturity value of one unit of SGB will be the market SGBs are tradable
Jewellery, Gold bars funds create a basket of
Definition security issued by
price of 1 gram of gold at the time of maturity or Gold coins gold bullion and are
Govt of India.
passive investment
4. Online applications will get a discount of INR 50 per gram instruments based on
gold prices
5. No Lock-in & Listed on Stock Exchanges.
6. Units are held in demat Interest 2.5% annual
NA NA
Payment interest payment
7. No Capital Gain Tax for Individuals on redemption.
Interests are taxable as per slab rate Gold ETFs can be sold in
SGBs can be sold in
the exchange anytime
Process: Liquidity Can be sold the secondary
and Golds funds can be
market
redeemed anytime
8. SGBs are issued multiple times in a year by Govt of India.
Reserve Bank of India will notify before the issuance. Theft, Loss due to Liquidity is low in
Risks Jewellers’ making the secondary
9. SGBs will be available only for specific time period, only charges market
during this period SGBs can be purchased
LTCG tax with indexation
10. Minimum – 1 gm & Maximum – 4 kgs per Financial Year Taxation GST while purchase
benefit
54EC Capital Gain Bonds
Long-term capital gain is the gain that is derived out of a sale of an asset (Land or Building) that has been held for
more than two years. You can invest the gain in certain specified bonds to claim tax exemption within 6 months of the
date of sale of the asset. 54EC bonds, or capital gains bonds, are one of the best way to save long-term capital gain tax
arising out of sale a capital asset.
Thank You