This NBFC having a major role in gold financing is a frequent visitor to capital market with debt offers. Having floated offer for Rs. 500 crore in September 2012 ( got around Rs. 287 crore) and for Rs. 300 crore in September 2013 ( got around Rs. 325 crore) it has again planned NCD offer for Rs. 300 crore that opened for subscription on 18.11.13 and will close on 02.12.13.
The issue is rated AA-/Negative by ICRA and CRISIL and thus it is a lower-rated debt offer. The issue is lead managed by ICICI Securities Ltd and registrar to the issue is Link Intime India Pct. Ltd. Each bond is having a face value of Rs. 1000 and varied coupon rate based on tenure (24 months to 60 months) and interest receiving option has interest rates ranging from 10.75% to 12.25% on different categories. Minimum application is to be made for 10 NCDs (i.e. Rs. 10000). It will be listed on BSE post allotment.
Looking at the last five fiscal's financials, the trend of top and bottom line indicated doubling pattern for fiscal 2010, 2011 and 2012 with commensurate rise in profits, but for 2013 it top and bottom line has shown growth of just around 20%. Its NPA are also growing year-on-year from 0.48% (2010) to 2.08% in Q1 of current fiscal. Though it is around 2% of the total lending, it is really alarming.
The company is the leader in gold financing sector and has pan India presence, but looking at the current trends for the industry, this offer is not worth considering at lucrative rates that are being offered.
Review By Dilip Davda on December 12, 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.
