Posted on Friday, July 29, 2016
The company plans to mobilize Rs. 1000 crore under Tranche-I and has a green shoe option for retaining oversubscription up to Rs. 4000 crore. Thus the aggregate size of the offer is the first such offer from private sector housing finance company so far. The offer is being made on 'First come - First Served' basis. Minimum application is to be made for 10 NCDs and in multiple of 1 NCD thereon, thereafter. The company has reserved 20% for QIBs, 20% for corporate, 30% for HNI and 30% for Retail category of investors. It has multi options of tenures and interest payments. Issue opens for subscription on03.08.16 and will close on or before 16.08.16.
It is offering interest payments on Monthly, Annually or Cumulative mode as per the choice of investors. The coupon rates are ranging from 8.74% to 9.30% and tenure of 3 yrs, 5 yrs and 10 yrs. For the first time, this company is offering CPI (Consumer Price Index) based coupon rate for 3 yrs. This offer is rated CARE AAA by CARE and BWR AAA by Brickwork. This rating indicates that instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry the lowest credit risk. Post issue its debt-equity ratio will stand enhanced to 12.04 from 11.25 (on consolidated basis). These NCDs will be listed on BSE and NSE. Although allotment is available in demat as well as physical mode, trading will take place in demat mode only.
On performance front, the company has been posting improvement in top and bottom line. Its income rose from Rs. 3216.36 crore in FY12 to Rs. 7856.65 crore for FY16 with commensurate rise in net profits from Rs. 355.26 crore for FY12 to Rs. 749.30 crore for FY16. It has over Rs. 70000 crore AUM as at 31.3.16.
This issue is lead managed by Edelweiss Financial Services Ltd, AK Capital Services Ltd, ICICI Bank Ltd, SBI Capital Markets Ltd, Trust Investment Advisors Pvt Ltd, Yes Securities (India) Ltd. Catalyst Trusteeship Ltd is the debenture trustee and Karvy Computershare Pvt Ltd is the registrar to the issue.
Conclusion: Offers with 'AAA' rating is most preferred by investors in debt market. Hence this offer is worth considering for investment for steady interest income.
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.
(SEBI registered Research Analyst-Mumbai).
Dilip Davda, a fraeelance journalist for more than 25 years, is a stock market analyst and news article writer. Since 1985, he has contributed to print media, electronic media and often appears on TV channels as visiting stock analyst. His articles are regularly publishes in Corporate India, Smart Investment (English and Gujarati weekly published from Ahmedabad), Free Press Journal and many other news papers & magazines. He is also a visiting stock analyst on DD News TV Channel.
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