Non-Convertible Debentures Investment Options in Real Estate

The real estate sector is anticipated to contribute a whopping 13% to India’s GDP by 2025. Real estate stands as the second biggest employer after the agriculture sector in India. This proves the potential and the dependence on this sector. This is justified by the novel investment options that the industry provides like fractional ownership and crowdfunding, to spreads its wings of accessibility and affordability.

Among many investment opportunities, let us confine the article to the Non-Convertible Debentures’ investments in Real Estate. To give a brief, Non-Convertible Debentures or NCDs are the debt instruments that cannot be converted to equity shares of the company. The company raises funds by issuing NCDs and the investors gain through the interest payouts on the capital invested with the company. The interest rates are called coupon rates.

Let us know some of the trending NCD investments in the real estate market.

Mindspace Business Park  REIT

The Mindspace REIT recently announced to raise the funds amounting to Rs.200 crores through the allotment of 2,000 secured, listed, senior, taxable, non-cumulative, rated, redeemable, Non-Convertible Debentures. This brings down the face value of each debenture to Rs.10 Lakhs.

The tenure of the NCDs is 36 months from December 17, 2020, which is deemed to be the date of allotment of NCDs. The coupon rate on the NCDs is 6.45% per annum.

The Mindspace NCDs are rated as AAA by CRISIL, which indicates a stable rating. The stable rating by the reputed rating agencies like CRISIL demonstrates the potential and a clean track record of the company.  If you are curious about investing in real estate Non-Convertible Debentures, you can go for investments like these.

Ultra Tech Cement

UltraTech Cement also has approved the allotment of Redeemable NCDs worth Rs.1,000 crores. These are under the unsecured NCDs category with a tenure of two years 358 days. The Non-Convertible Debentures interest rate is 4.57% per annum and will e listed on the National Stock Exchange Of India. You can trade your stocks at NSE.

The face value is Rs.10,00,000 each, of 10,000 rated, listed, redeemable, unsecured NCDs that altogether make Rs.1000 crores.

Embassy REIT

Embassy Office Park REIT disclosed the information that it is going to raise funds of Rs.2,600 crores through NCDs to fund its commercial asset Embassy Techvillage in Bengaluru. 26,000 listed, rated, secured, redeemable, transferable, rupee-dominated NCDs have been issued. The face value of each NCD is Rs.10 Lakhs. The aggregated value of the NCDs would therefore be Rs.2,600 Crores.

With the above NCD investment options currently trending in India, you get to invest in NCDs through the giant companies that are credible. NCDs ensure a regular flow of income through interest pay-outs. The secured NCDs ensure the safety and security of your investment. With alternatives like trading in the secondary market as you cannot withdraw it prior to the maturity date, the liquidity concern is reduced to a great extent.

BlackSoil Capital Pvt Ltd

BlackSoil is a venture debt platform that is focused on structured and real estate debt. It has recently raised Rs.32 Crore through NCDs and this amounts to Rs.100 Crores in 2020. The company said that 70% of the funds were raised from the existing investors who were high-net-worth individuals. The NCDs issued by the company are secured NCDs. The NCDs with a tenure of three years were issued to more than 60 investors. The company said that these funds would be disbursed to the mid and growth-stage businesses in the startup ecosystem. BlackSoil holds a huge record of raising Rs.265 crores in four years i.e., from 2016.

With the above NCD investment options currently trending in India, you get to invest in NCDs through the giant companies that are credible. NCDs ensure a regular flow of income through interest pay-outs monthly, quarterly or annually. The secured NCDs are a type of NCDs (the other being unsecure NCDs)  ensure the safety and security of your investment as they are backed by the company’s physical assets. You can also invest through digital platforms like Assetmonk with just a click away. The properties listed on the platform are highly credible and undergo thorough due diligence.

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Written by Angela Ant

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