Kosamattam Finance, a NBFC primarily engaged in gold loan business, is coming out with its fourth debt offer since April 2014 and has thus joined the list of frequent debt market visiting company. The company is now coming out with its NCD offer for Rs. 200 crore (including greenshoe option of Rs. 100 crore). The issue is opening on 10.02.15 and will close on or before 11.03.15. Post allotment NCDs will be listed on BSE.
Company is issuing Secured and Unsecured Redeemable Non-Convertible Debentures of Rs. 1000 each under seven series and has coupon rates ranging from 11% to 13% and has tenure ranging from 400 days to 70 months and Monthly and Cumulative payment options. Effective yield ranges from 11.75% to 13.80% and thus the offer looks very attractive, but the rating is poor. The company is raising these funds to meet its lending business purpose. Investors can opt for allotment in demat or physical mode, but trading will take place only in demat mode.
Minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and in multiples of 1 NCD thereon, thereafter. Issue is lead managed by Vivro Financial Services Pvt. Ltd. and Karvy Computershare Pvt Ltd is the registrar to the issue. This issue is rated CARE BBB- (Triple B minus) by CARE that indicates instruments with this rating are considered to have a moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk. Company's NPAs have risen tremendously in the current fiscal till November 2014 end to a level of 0.78% from 0.14% (on net basis).
On the performance front, the company outperformed in the fiscal 2010-11, 2011-12, 2012-13 and then witnessed fall in its net profit for the fiscal 2013-14 the marked sharp fall in first eight months working. This may prove hard for it to service this debt offer going forward.
Review By Dilip Davda on December 10, 2019
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
