This Gold Loan Company is a frequent debt market visitor from South that is making its 11th Debt offer that is opening on 19.11.14. In fact, this is the fourth offer from this company in 2014. Off late, declined prices of Gold has already had its impact as this company is planning auction of Gold kept as security against loans to recover its lending.
The company is again coming out with a Secured Non-Convertible Debentures having a face value of Rs. 1000 each to mobilize Rs. 200 crore with a green shoe option to retain 100 per cent oversubscription thus raising the total issue size to Rs. 400 crore. The company is offering this issue with coupon rates ranging from 10% to 10.50% to QIPs and FIs whereas 10.75% to 11.25% to HNIs and Retail investors. This offer has tenure ranging from 24, 36 and 60 months and special 400 day tenure to suit individual needs of parking their funds. Interest payment will be done on Monthly or Annual basis as per the choice of investors. Minimum application is to be made for 10 NCDs and in multiples of 1 NCD thereon, thereafter. This offer is available in demat and physical format, however, trading will take place only in demat mode. Issue opens for subscription on 19.11.14 and will close on or before 18.12.14 depending on the response. Post allotment, NCDs will be listed on BSE. This issue is lead managed by ICICI Securities Ltd and Link Intime India Pvt Ltd is the registrar to the offer. IDBI Trusteeship Services Ltd is the Debenture Trustee.
ICRA has assigned ICRA AA- rating to this offer indicating a high degree of safety regarding timely servicing of financial obligations. The rating provided by ICRA may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating.
When inflation has started cooling down and the market is expecting a rate cut from RBI in its forthcoming policy meet in first week of December, this offer appears lucrative. But considering the status of Gold Loan Company due to sliding gold prices, it also raises doubt on immediate future prospects of such companies.
In its recent previous offers, the company managed to garner response from its loyal investors and may continue to do so. However, no need to get tempted from higher coupon rates offered now as last few quarters have shown declining trends in top and bottom line. In fact, in today's online regime, investors are well informed to make the final decision on investment at their own discretion.
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.
