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SREI Infra Fin NCD offer review - Sept 2016

Published on Wednesday, September 7, 2016 by Dilip Davda

SREI Infra Fin NCD offer review - Sept 2016

SREI Infrastructure Finance Ltd (SIFL), a frequent visitor to debt market, is engaged in the business of Infrastructure financing and registered as an Infrastructure Finance Company under the RBI regulations. Infrastructure includes sectors like Transport, Energy, Water Sanitation, Communication, Social & Commercial Infrastructure etc. This is the 9th debt offer from it since 2011.


For repayment of its previous loans and to meet its working capital requirement the company is coming out with a Secured Redeemable Non-Convertible Debentures of Rs. 1000 each for a base amount of Rs. 250 crore with a green shoe option to retain oversubscription to the extent of Rs. 750 crore, making the aggregate size of the offer of Rs. 1000 crore. Minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD thereon, thereafter. It offers interest payments on Cumulative, Monthly and Annual basis and has a coupon rates ranging from 9.08% to 10% and tenure of 400 days, 3 yrs and 5 yrs as per the choice of the investors. Allotment will be made on “first come – first served” basis and is also available in demat as well as physical mode, however, trading will take place only in demat mode. Issue has already opened for subscription on 07.09.16 and will close on or before 28.09.16. Post allotment the NCDs will be listed on BSE and NSE. This offer is rated as BWR AA+ (Double A plus) by Brickwork Rating, that indicates high degree of safety regarding timely servicing of financial obligations. Post issue SIFL’s debt equity ratio will stand enhanced to 5.64 from the present 5.28 times.


Lead managers to this offer are ICICI Securities Ltd., A K Capital Services Ltd., Edelweiss Financial Services Ltd., IIFL Holdings Ltd., Karvy Investor Services Ltd., SREI Capital Markets Ltd., Trust Investment Advisors Pvt Ltd., Yes Securities (India) Ltd. Axis Trustee Services Ltd is the debenture trustee and Karvy Computershare Pvt Ltd is the registrar to the issue.


On performance front, for last three fiscals, on consolidated basis the company has shown static top line with sliding bottom lines.  Its total income/net profits were Rs. 3260.30 cr. / Rs. 138.51 cr. (FY14), Rs. 3360.32 cr. / Rs. 130.02 cr. (FY15) and Rs. 3261.94 cr. / Rs. 72.52 cr. (FY16). However, things are now expected to improve with major thrust on infra developments by the Government.


Conclusion: Considering market friendly coupon rates with AA+ rating, investors may park their funds for regular interest income.

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About Author

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).

About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in new papers.


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