Chemmanur Credits Launches 12% NCDs: High Yields, Moderate Risk

Chemmanur Credits and Investments Limited has launched a secured Non-Convertible Debenture (NCD) issue in August 2026, promising attractive interest rates of up to 12% per annum. These NCDs, from an NBFC primarily focused on gold loans, are poised to offer effective yields as high as 12.68%.

Key Investment Figures

• Maximum Interest Rate: 12% per annum
• Effective Yield: Up to 12.68%
• Tenure Range: 400 days to 72 months
• Minimum Investment: ₹10,000
• Credit Rating: ‘BBB/Stable’ by India Ratings & Research

This NCD issue presents several compelling factors for investors seeking higher returns in a secured instrument. The company’s established gold loan business provides a stable operational foundation.

The Upside Potential

• Attractive Interest Rates: Offering up to 12% annually with yields reaching 12.68%.
• Secured Nature: The NCDs are fully secured, providing a layer of protection for investors.
• Improving Financials: Chemmanur Credits reported steady growth in total assets and income, alongside a significant increase in profit after tax in FY2025-26.
• BSE Listing: Proposed listing on BSE aims to enhance secondary market liquidity.

However, a thorough analysis must also consider the inherent risks associated with this offering, particularly its credit profile and sector-specific vulnerabilities. The ‘BBB/Stable’ rating signals a moderate degree of safety, yet it falls below higher-rated instruments.

Navigating the Risks

• Moderate Credit Risk: The ‘BBB/Stable’ rating implies a higher credit risk compared to AA or AAA-rated NCDs.
• NBFC Business Risks: Exposure to credit risk, collection risk, regulatory changes, economic slowdowns, and gold price fluctuations.
• Liquidity Concerns: Potential for reduced liquidity in the secondary market post-listing.
• Interest Rate Risk: Fluctuations in market interest rates could impact the NCD’s value.

Investors considering Chemmanur Credits’ NCDs must carefully balance the allure of high interest rates against the moderate credit risk and sector-specific challenges. The issue, opening on August 4, 2026, and closing on August 17, 2026, mandates a detailed review of the prospectus before committing capital.