360 One Prime Limited- A Dive into Bond Public Issue

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360 One Prime Limited (formerly IIFL Wealth Prime Limited) is offering Secured, Rated, Listed, Redeemable Non-Convertible Debentures which will open on May 24, 2024, and close on June 06, 2024.  This is an attractive investment opportunity for investors as it holds a credit rating of AA/Stable by CRISIL and ICRA, supported by the company’s strong profile and impressive financial track record. This blog provides information about the company’s details, the bond public issue, and financial performance. Below are the details of the issue:

Issue Highlights

Issuer Name 360 One Prime Limited
Nature of Instrument Secured Rated Listed Redeemable Non-Convertible Debentures
Rating AA/Stable by CRISIL & ICRA 
Seniority Senior Secured
Face Value Rs. 1,000 per NCD
Base Issue Size Rs. 100 crore
Option to retain oversubscription Rs. 400 crore 
Coupon Up to 9.85%
Tenor 18/24/36/60/120 months
Issue Date May 24, 2024, to June 06, 2024
Minimum Investment Rs. 10,000 only

Specific Terms of the NCD Public Issue across different series

Company Profile

  • 360 ONE Prime Limited, formerly known as IIFL Wealth Prime Limited, was established as Chephis Capital Markets Limited on August 31, 1994, under the Companies Act, 1956.
  • 360 ONE Prime Limited is registered as a non-deposit-taking non-banking financial company with the RBI and operates as a wholly-owned subsidiary of 360 ONE WAM LIMITED (Formerly known as IIFL Wealth Management Limited). 
  • The registered and corporate office is situated in Mumbai. 
  • 360 ONE WAM Limited (Promoter Company) is one of India’s leading wealth and alternates-focused asset firms (Source: CareEdge Report). 
  • As of 31st March 2024, the company’s loan book stood at ₹6,388.27 crore and total revenue from operations is ₹894.10 crores for the fiscal 2024. The products primarily include: 
  • Loans against Securities (LAS)
  • Loans against property (LAP) 
  • Unsecured lending products
  • Term loans and advances

The product-wise AUM as of March 31, 2024, is as follows: 

Corporate Structure

Performance Highlights of 360 One Prime Limited (as of March 31, 2024) 

Financial Parameters of the Company (Rs. in cr.)

Particulars FY 2024 FY 2023 FY 2022
Net Worth 1434.15 1394.18 1271.47
Profit after Tax 273.63 234.52 282.80
Interest Income 700.13 509.30 507.03
% Net Stage 3 Loans on Loans (NPA) 0.00% 0.00% 0.00%
Total Debts to Total Assets 0.82 0.80 0.80
Tier 1 Capital Adequacy Ratio 20.93% 19.52% 23.18%
Tier II Capital Adequacy Ratio 0.30% 0.26% 0.43%

Rating Rationale

CRISIL Ratings and ICRA have combined the business and financial risk profiles of 360 ONE WAM Ltd and its subsidiary, 360 ONE Prime Ltd (formerly IIFL Wealth Prime Ltd) because they are collectively known as 360 ONE, reflecting significant operational, financial, and managerial integration, along with a shared brand – ‘360 ONE’.

Strengths

  • High asset quality is attained through strong credit assessments and efficient risk management frameworks.

The company has a robust credit assessment and risk management framework to identify, monitor, and manage risks in its lending operations. 

Due to this framework, it has been able to consistently uphold a high-quality loan portfolio by monitoring loan performance, evident in the Nil Gross Stage 3 and Nil Net Stage 3 as of March 31, 2024, March 31, 2023, and March 31, 2022, respectively.

  • Established brand and lineage.

The promoter of 360 One Prime Limited is  360 ONE WAM Limited, a leading wealth and alternates-focused asset firm in India, offering a wide range of services such as advisory, wealth management, asset management, broking, and distribution to high-net-worth individuals (HNIs) and Ultra-HNIs. The 360 ONE group is backed by a senior management team with extensive experience in the wealth management sector and leverages its dominant position to serve clients, primarily ultra-HNIs and HNIs. As the lending arm of the 360 ONE group, the company benefits from this partnership, providing top-tier financial solutions and becoming a major player in wealth management and non-banking finance.

  • Prudent decision-making coupled with strong execution capabilities.

The company’s robust systems ensure efficient processing of loan applications and prudent credit decision-making with streamlined procedures for loan approval, administration, collection, and enforcement. It provides high service quality standards and tailored solutions to meet clients’ specific requirements and credit profiles.

  • Strong profitability supports comfortable capitalization.

The company operates as a middle-layer non-banking finance company and complies with RBI’s capital-to-risk assets ratio requirements. It maintains a strong capitalization to ensure a healthy financial position.

  • An experienced Board of Directors and a highly skilled management team with extensive expertise.

The Board of Directors consists of industry experts who contribute their experience and governance to the company, supported by a well-experienced management team with a track record of over a decade in the wealth management domain, who have contributed to changing regulatory and economic landscapes since its inception in Fiscal 2016.

Challenges

  • Risk stemming from regulatory factors in the wealth management sector.

Wealth management is a largely fee-based business and any credit event has minimal impact on the capital base. The wealth and asset management sectors operate within a heavily regulated landscape, and any unforeseen regulatory changes can adversely impact the business model.

  • Low diversity of lending operations.

The lending operations of 360 ONE Prime began in fiscal 2016, offering LAS to clients of 360 ONE WAM. The Group’s net inflows are subject to fluctuations in the capital markets. Although the Assets Under Management (AUM) is anticipated to bolster revenues, lower net inflows could impact revenue expansion. Revenue streams are also vulnerable to regulatory changes, such as those concerning the total expense ratio (TER). The Group’s transition to an advisory model from the broker model has successfully mitigated regulatory uncertainties with distribution fees from the manufacturer.

  • Franchisee Risks.

The Group depends on its established brand and franchise developed over time to retain and attract clients. Any harm to its reputation could impact the entire business. Furthermore, retaining relationship managers is crucial for maintaining low client attrition rates.

(Source: Rating Rationale)

Investor Categories 

The investor categories in a bond public issue refer to the various segments or types of investors who can take part in the offering. The allocation ratio is prepared by the issuer based on the guidelines set by regulatory bodies such as SEBI for distributing the existing bonds among different types of investors. Here is the allocation ratio for 360 One Prime Limited Public Issue across these investor categories.

Category I- Institutional Portion- 25% of the overall issue size- Public Financial Institutions, Insurance companies, Scheduled Banks, Provident Funds, AIFs, etc.

Category II– Non-institutional Investors- 25% of the overall issue size- Companies, Co-operative Banks, Trusts, Partnership Firms, Association of Persons, etc.

Category III– High Net-worth Individual Investors- 25% of the overall issue size- Resident Indian individuals or Hindu Undivided Families through the Karta applying for an amount aggregating to above Rs. 10,00,000 across all options of NCDs in the Issue.

Category IV– Retail- 25% of the overall issue size- Resident Indian Individuals or Hindu Undivided Families through Karta applying for an amount aggregating up to and including Rs. 10,00,000.  

 

 

How to Apply through TheFixedIncome.com?

Information Memorandum:

An Information Memorandum (IM) is a detailed document that provides investors with extensive information about the bond issue. It contains insights into the issuer’s business, financial background, management team, details of offerings, associated investment risks, and fund allocation from the issue,  along with regulatory and legal disclosures.

The link to the Information Memorandum of bond public issue of 360 One Prime Limited is given below:

https://www.thefixedincome.com/storage/bondprimary_imfiles/1715951169360_one2024.pdf

Conclusion

Summing up, the bond public issue by 360 One Prime Limited presents an excellent investment opportunity for those investors interested in Secured Rated Listed Redeemable Non-Convertible Debentures. Investors can participate in this offering if it aligns with their risk tolerance and investment objectives and reap the benefits associated with it. However, they need to go through the terms and conditions given in the Information Memorandum carefully before investing. 

Disclaimer: This article is based on publicly available information and other sources believed to be reliable. The information provided in this article is intended for general, educational, and awareness purposes only and should not be considered a comprehensive disclosure of every material fact. It should not be interpreted as investment advice for any individual or entity. The article makes no guarantees regarding the completeness or accuracy of the information and disclaims all liabilities, losses, and damages arising from the use of this information. Investments in debt securities/ municipal debt securities/securitized debt instruments are subject to risks including delay and/ or default in payment. Read all the offer-related documents carefully.

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