SREI Infrastructure Fin NCD offer Review - Feb 2018
Published on Sunday, February 11, 2018 by Dilip Davda
Srei Infrastructure Finance Ltd. a frequent visitor to debt market is once again coming out with a debt offer of 20,00,000 Secured Redeemable Non-Convertible Debentures of Face Value of Rs. 1,000/- each aggregating up to Rs. 200 crore ( Base Issue Size ), with an option to retain oversubscription up to additional Rs. 1800 crore taking the total issue size to Rs. 2000 crore. (Tranche 1 Issue). Tranch ! issue comprises of Rs. 150 crore worth Secured Redeemable NCDs and Rs. 50 crore worth Unsecured Redeemable NCDs. Last issue was in January 2017 in which the company allotted NCDs worth Rs. 335.18 crore in February 2017. (Against self limit of Rs. 706.64 crore.)
To part finance it’s lending and re-payment of loans and raise general corpus fund, the company is raising debt capital. This offer has already opened for subscription on 09.02.2018 and will close on or before 07.03.18. Minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD (i.e. Rs. 1000) thereon, thereafter. This offer has coupon rates ranging from 8.43 per cent to 9.50 per cent and tenure of 400 days, 3 yrs and 5 yrs and 10 yrs. Interest payment will be on Monthly, Annual or Cumulative basis as per the choice of investors. Post allotment, NCDs will be listed on BSE and NSE. Allotment will be made on first come-first serve basis. Issue is jointly lead managed by SPA Capital Advisors Pvt. Ltd. and Srei Capital Markets Ltd. and Karvy Computershare Pvt Ltd is the registrar to the issue. Axis Trustee Services Ltd. is the Debenture Trusty for this issue. Post Issue Company’s debt equity ratio will stand enhanced from 4.60 times to 5.30 times. Allotment will be made in demat mode for all other categories except retail individuals. However, trading will take place in demat mode only. Its Net NPAs that were at 3.54% of the total gross assets as on 31.03.17 has decreased to 2.19% as on 31.12.17.
For January 2017 NCD issue, set of merchant banker differed from the current ones.
On performance front, it has posted (for first nine months of current fiscal) lower top line of Rs. 1332.24 cr. as on 31.12.17 against Rs. 1653.65 cr. as on 31.12.16. However, for the said periods, its net profit increased from Rs. 75.35 cr. to Rs. 93.34 cr. For FY 17 it earned net profit of Rs. 96.07 cr. on total income of Rs. 2299.62 cr.
This offer is rated “BWR AA+” by Brickworks Rating. This rating is considered to have high degree of safety regarding timely servicing of financial obligations.
Conclusion: Those looking for steady interest income may consider moderate investment in this offer for medium to long term.
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 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.