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Edelweiss Retail Finance NCD offer review

Published on Monday, March 5, 2018 by Dilip Davda

Edelweiss Retail Finance NCD offer review

Edelweiss Retail Finance Ltd. (ERFL) is retail finance segment arm of Edelweiss group is coming out with a maiden debt offer. It is focusing on secured and unsecured loan products to suit the needs of the individuals and corporates. Its product includes SME Finance, Loan against Property, Construction finance and Rural finance. ERFL is coming out with an issue of secured redeemable non-convertible debentures of Rs. 1000 each to raise Rs. 250 crore. It has an option to retail oversubscription to the tune of Rs. 250 crore, thus making the total issue size of Rs. 500 crore. Company is raising this fund for the purpose of onward lending, financing, and for repayment of interest and principal of existing borrowings of Company and general corpus fund needs. There are no put and call options for this offer.

Issue opens for subscription on 07.03.18 and will close on or before 22.03.18. Minimum application is to be made for 10 NCDs and in multiples of 1 NCD thereon, thereafter. It has tenures of 3, 5 and 10 years and has the coupon rates ranging from 8.42% to 9.25% and has interest payment options on Monthly or Annual basis. This offer is graded as CRISIL AA/Stable and ICRA Aa/Stable by CRISIL Ltd. and ICRA Ltd. respectively. The rating of NCDs by CRISIL and ICRA indicate that instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations and carry very low credit risk. Post allotment, these NCDs will be listed on BSE and NSE. Option for allotment in demat and physical mode is available, but trading will take place only in demat mode.  Allotments, in consultation with the Designated Stock Exchange, shall be made on a first-come first serve basis, based on the date of upload of each application in to the electronic book with Stock Exchanges, in each portion subject to the allocation ratio.

Lead managers to this issue are ICICI Securities Limited, A. K. Capital Services Limited, Edelweiss Financial Services Limited, IIFL Holdings Limited, Karvy Investor Services Limited, Srei Capital Markets Limited, Trust Investment Advisors Private Limited, YES Securities (India) Limited and Karvy Computershare Pvt. Ltd. is the registrar to the issue. IDBI Trusteeship Services Limited will be the Debenture Trustee for the NCD Holders.

On performance front for last three fiscals  ERFL has posted total revenue/net profits of Rs.45.25 cr. / Rs. 7.66 cr. (FY15), Rs.161.47 cr. / Rs. 24.70 cr. (FY16) and Rs. 253.53 cr. / Rs. 31.95 cr. (FY17). For these years, its paid up equity has been Rs. 15.66 cr., Rs. 29.95 cr. and Rs. 32.95 cr. respectively. For nine months of current fiscal ended on 31.12.17 it has earned net profit of Rs. 25.19 crore on total revenue of Rs. 245.12 cr. On the same date its loan book was 283.30 crore with a capital adequacy ratio of 16.19% compared to the RBI stipulated minimum requirement of 15%. Gross NPAs as on the said date were 1.01%. As on 31.01.18 its paid up equity was at Rs. 42.95 crore.

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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. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. 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 news papers.



1. Arvindbhai Mangabhai Patel   I Like It. |Report Abuse|  Link|March 8, 2018 1:42:08 PMReply
How much Subscribe on day 1.