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SCUFL is a deposit-taking NBFC with multiple product lines, including loans to the small enterprise finance segment; loans against gold; financing for two wheelers, appliances and other commercial goods, pre-owned and new vehicle loans and personal loans. The company claims to be the market leader in the small loan segment with an estimated market share of 41.6% in fiscal 2013. It is a part of the Shriram Group of companies, a financial services conglomerate in India from the southern region. Its accounts for 40.33%, 29.39%, 24.42% and 48.98% of its assets under management for the financial years 2013, 2012, 2011 and six months ended September 30, 2013, respectively. Since commencing operations in 1986, it has established a pan-Indian presence, through 1,021 business outlets as of September 30, 2013. SCUFL caters to the financing needs of small enterprises and retail customers, which constitute a significant part of its customer base and operates on 'hun- and spoke' business model.
To meet its fund requirement, the company is coming out with a Secured Redeemable Non-Convertible Debentures of face value of Rs. 1000 each bearing coupon rates ranging from 10.75% to 11.75% depending on tenure and the category. It offers annual payment as well as cumulative mode schemes for a period of 24 months, 36 months and 60 months. The allotment is available in demat as well as in physical mode, however, trading will take place only in demat mode.
The company is aiming to raise Rs. 100 crore as a base size with an option to retain 100% oversubscription to make it a total issue of Rs. 200 crore. Minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD thereon, thereafter. Post allotment, the instrument will be listed on BSE. Issue opens for subscription on 16.04.14 and will close on or before 16.05.14. ICICI Securities Ltd, AK Capital Services Ltd and the joint lead manager to the offer and Shriram Insight Share Brokers Ltd are the registrar to the issue. GDA Trusteeship Ltd is the Debenture Trustee. CARE has rated the issue as 'CARE AA' indicating a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
Looking at the fancy of the group in southern region and the loyal retail investors, the issue is expected to get good response. Those who are keen for regular interest income can bank on it.
Review By Dilip Davda on December 11, 2019
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.
Email: dilip_davda@rediffmail.com
The Shriram City Union Finance NCD April 2014 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if Shriram City Union Finance NCD April 2014 worth investing. The Shriram City Union Finance NCD April 2014 Note sets the NCD expectations in systematic way which tells you if Shriram City Union Finance NCD April 2014 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Shriram City Union Finance NCD April 2014 by providing NCD recommendations i.e. subscribe, avoid and neutral.
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