Capri Global Bonds: Features, YTM, Credit Rating & Key Risks Explained

Quick Overview

Capri Global Capital Limited (CGCL) Bonds & NCDs (e.g., ISINs: INE180C07122, INE180C07130) are senior secured, exchange-listed Non-Convertible Debentures issued by a diversified NBFC specializing in MSME lending, affordable housing finance, construction finance, and retail gold loans across India. Backed by strong investment-grade credit ratings of CARE AA- / Stable and CRISIL AA- / Stable, these debentures offer contractual coupon rates ranging between 9.00% and 10.25% p.a. across monthly, quarterly, and annual payout structures. Secured by a minimum 1.10x first pari-passu asset cover on standard performing loan receivables, they trade on exchange debt platforms at secondary Yields to Maturity (YTM) of ~9.50%–10.15% p.a.

What Are Capri Global Bonds?

Capri Global Bonds refer to debt instruments issued by Capri Global Capital Limited, a non-banking financial company (NBFC) that raises funds for its lending operations, business expansions, and other financial activities. These bonds allow investors to lend money to the company in exchange for fixed returns over a defined period.

Key Features:

Type of Bond: Senior Secured

Coupon Rate: Fixed

Coupon Payment Frequency: Yearly

Maturity Date: 13 April 2027

Bond Issuer: Capri Global Capital Limited

Bond Rating: Acuite AA (Stable)

Capri Global bonds are typically listed on stock exchanges, ensuring market transparency, but they are not as liquid as equities and may not trade as frequently.

Key Features of Capri Global Capital Bonds

Here are the key features of Capri Global Capital Limited bonds:

Bond Name: Capri Global Capital Limited April’27

ISIN: INE180C07221

Minimum Investment Amount: ₹1,029

Face Value: ₹1,000

Coupon Rate: 8.90% (fixed)

Interest Payout Frequency: Yearly

YTM (Yield to Maturity): 8.50%

Clean Price: ₹100.45

Dirty Price: ₹102.94

Tenure: 1 year, 2 months, and 20 days

Credit Rating: Acuite AA (Stable)

Mode of Issue: Public Issue

Collateral: 1.10x (secured)

These bonds offer investors a fixed interest return, with principal repayment scheduled for maturity.

Bond Structure: Senior Secured and Coupon Type

Capri Global Capital bonds are senior secured debt instruments, meaning:

They are backed by collateral, providing bondholders with priority in the event of liquidation or default.

Bondholders are repaid before other unsecured creditors in case of any financial distress faced by the company.

The fixed coupon rate of 8.90% means that investors will receive periodic interest payments (annually) based on the bond’s face value. The bond’s senior secured status and collateral provide a level of protection against potential defaults, though not eliminating risk entirely.

Yield to Maturity (YTM) and Coupon Rate Explained

Yield to Maturity (YTM)

YTM represents the total return an investor can expect to earn if the bond is held until maturity, assuming all interest payments are made as scheduled. The YTM for Capri Global bonds is 8.50%, which factors in both the bond's coupon payments and its clean price.

• Clean Price: ₹100.45 (without accrued interest)

• Dirty Price: ₹102.94 (with accrued interest)

The YTM of 8.50% indicates the annualised return that an investor would earn if the bond is held until its maturity in April 2027.

Coupon Rate

The coupon rate of 8.90% is fixed, which means investors will receive an annual interest payment based on the face value of the bond (₹1,000). This is paid out once per year, providing steady income to bondholders.

Credit Rating and Collateral Coverage

Credit Rating

The credit rating of Acuite AA (Stable) assigned to the Capri Global bonds indicates that they have a high degree of safety concerning timely servicing of financial obligations. However, they are subject to moderate credit risk in comparison to higher-rated bonds.

Acuite AA (Stable) implies:

A strong capacity to meet financial obligations, with low risk of default.

Stable outlook, indicating no immediate expectation of rating downgrades.

Collateral and Security Structure

The bonds are secured with collateral coverage of 1.10x, meaning that the value of the collateral securing the bonds exceeds the bond’s value by 10%. This additional coverage provides extra protection for bondholders, reducing potential loss in case of financial issues faced by the issuer.

Issuer Background: Capri Global Capital Limited

Capri Global Capital Limited is a prominent NBFC with a focus on corporate and retail lending, especially in sectors such as home loans, business loans, and SME financing. The company has a growing presence in the Indian financial landscape and offers flexible financing solutions.

Capri Global’s established business model and diverse funding base enable it to raise capital through debt instruments like bonds to support its expansion efforts.

Market Overview and Financial Performance

Capri Global Capital Limited has steadily grown its Assets Under Management (AUM), reaching substantial market cap and profits, reflecting a solid financial base. The company partners with various institutional lenders, including major banks and financial institutions, providing it with access to a wide array of funding sources.

The company’s market cap and profitability indicators suggest that it is well-positioned within its sector, but investors must still consider industry and economic fluctuations.

Key Risks Associated with Capri Global Bonds

Like all corporate debt instruments, Capri Global bonds carry risks that investors should be aware of:

• Credit Risk: The potential for the issuer to default on interest or principal payments.

• Interest Rate Risk: Bond prices may fluctuate with changing interest rates, affecting market value.

• Liquidity Risk: While the bonds are listed, they may not always be easy to trade in the secondary market.

• Collateral Risk: The realisable value of the assets securing the bonds may vary over time.

• Market Risk: Economic conditions or sector-specific challenges may impact the issuer’s ability to service debt.

Liquidity and Secondary Market Considerations

Though the Capri Global bonds are listed, secondary market liquidity can be limited compared to other financial instruments like equities. Bond prices can fluctuate depending on market conditions, interest rates, and company performance. As such, exit opportunities may not always be immediate.

How Capri Global Bonds Compare to Other Investment Options

Compared to traditional fixed deposits (FDs), Capri Global bonds offer higher yields (8.50% YTM vs. 5-7% in FD rates). However, bonds carry market risk and credit risk, while FDs are generally considered safer (when covered by deposit insurance). Understanding the credit rating, collateral coverage, and interest payment schedule is key to comparing these two investment types.

Common Misconceptions About Capri Global Bonds

Common misconceptions about Capri Global bonds include:

“Capri Global bonds are risk-free.”

Bonds carry market and credit risks, even when secured.

“Credit ratings guarantee safety.”

While AA ratings suggest high safety, they do not eliminate default risk.

“The coupon rate is the return on investment.”

The YTM reflects the actual return, which may differ from the coupon rate based on bond price movements.

Conclusion

Capri Global bonds provide a structured investment with senior secured status, offering attractive fixed returns for investors. With an 8.50% YTM, Acuite AA (Stable) credit rating, and 1.10x collateral coverage, these bonds are positioned as a relatively stable fixed-income option. However, they still carry credit risk, market risk, and liquidity risk.

Investors must assess credit ratings, collateral protection, and issuer performance before investing.

Disclaimer

This blog is intended solely for educational and informational purposes. The bonds and securities mentioned herein are illustrative examples and should not be construed as investment advice or personal recommendations. BondScanner does not provide personalized investment advice through this content.

Readers are advised to independently evaluate investment options and seek professional guidance before making financial decisions. Investments in bonds and other securities are subject to market risks, including the possible loss of principal. Please read all offer documents and risk disclosures carefully before investing.