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Manappuram Finance NCD Offer - December 30, 2013

Published on Monday, December 30, 2013 by Dilip Davda

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As a surprise announcement, one more debt offer opened on 30.12.13 and that is from Manappuram Finance Ltd. (erstwhile known as Manappuram General Finance & Leasing Ltd.). Details of the same are as under:

Manappuram Finance is primarily engaged in gold loans business. Now it has planned to diversify into SME corporate financing and housing loan segment. To part finance this diversion, the company is offering Secured Redeemable non-convertible debentures of Rs. 1000 each having coupon rates of 11.50% to 12.50% with a tenure of 400 days, 2,3,5 years and 70 months. It also offers cumulative, annually and monthly interest payment options translating into yields ranging from 11% to 12.94% depending on the option selected.

The base size of the issue is Rs. 100 crore and has an option to retain oversubscription to the tune of Rs. 100 core making it a total offer of Rs. 200 crore. Minimum investment is to be made for 10 debentures and in multiples of 1 debenture thereon thereafter. Issue has already opened on30.12.13 and will close on or before 20.01.14.The issue is lead managed by ICICI Securities Ltd and Link Intime India Pvt. Ltd. is the registrar to the offer. This instrument is rated A+/Negative by CRISIL indicting an adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. Post allotments, debentures will be listed on BSE.

On performance front, due to sharp decline in gold prices, company suffered a severe setback in top and bottom line for 2012-13 and trends are expected to continue as gold prices are on decline and this has perhaps forced the management to diversify its activities.

According to market pundits, due to poor grading, issuer has tried to lure investors with higher coupon rates.

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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.

Email: dilip_davda@rediffmail.com


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