SREI Infra NCD Tranche 2 Issue review - Jul 2015 (Apply)

Well, while we witnessed bunch of main board and many more SME IPOs since beginning of this financial year amidst hope for rate cuts and perhaps the corporate issuers too were waiting for the same. However, the ice is being broke by SREI Infrastructure Finance for its Tranche 2 debt offer. Details of the same are as under:

With a large customer base and over Rs. 25240 crore of Consolidated Assets Under Management as at March 31, 2015, Srei Group has a pan-India presence with a network of 99 offices. SREI Infra is a registered NBFC engaged in infrastructure financing activities. The group has standing of over 25 years.

To part finance its lending/repayment of loans (upto 75% of the issue proceeds) and for meeting general corpus funds (up to 25% of the issue proceeds) the company is coming out with a 20,00,000 SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES OF FACE VALUE OF Rs. 1,000/- EACH. Base issue size is Rs. 200 crore with a green shoe option to retain oversubscription up to Rs. 1000 crore within the residual shelf limit of Rs. 1173.86 crore. Issue is rated as CARE AA- (Double A minus) by CARE and BWR AA (Double A) by Brickwork indicating to have high degree of safety regarding timely servicing of financial obligations. Issue opens for subscription on 01.07.15 and will close on or before 20.07.15. Minimum application is to be made for 10 NCDs and in multiple of 1 NCD thereon, thereafter. Issue has interest option on Monthly, Annual and Cumulative and the coupon rate ranges from 10% to 10.75% depending on the choice of investors. It offers tenure for 39 and 60 months. Application can be made for allotment in demat or physical mode (only for retail investors), however, trading will take place only in demat mode. Issue is lead managed by ICICI Securities Limited, A. K. Capital Services Limited, Edelweiss Financial Services Limited, SPA Capital Advisors Limited and Srei Capital Markets Limited, and co-lead managers are Bajaj Capital Limited, Integrated Enterprises (India) Limited, Karvy Investor Services Limited, RR Investors Capital Services Private Limited and SMC Capitals Limited. Axis Trustee Services Limited is the Debenture Trustee and Karvy Computershare Pvt Ltd is the registrar to the issue. Post allotment, NCDs will be listed on BSE.

Company's equity capital as on 31.03.15 is Rs. 503.24 crore with a support of free reserves of Rs. 2234.78 crore. For last three fiscals company has posted total turnover/net profit of Rs. 1666.47 crore/Rs. 94.96 crore (FY 2013), Rs, 1805.85 crore/Rs. 59.32 crore (FY 2014) and Rs. 1900.03 crore/Rs. 90.93 crore. It is suffering in bottom lines in line with general trends of the market and stalled spending on infrastructures. Its net NPA for the year ended 31.03.15 increased to 3.84% against 2.75% for the previous fiscal. Its debt/equity ratio as on 31.03.15 on pre-issue is at 2.33 that will stand enhanced to 2.70 post issue.

Conclusion / Investment Strategy

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Review By Dilip Davda on December 13, 2019

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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 SREI Infra Finance NCD July 2015 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if SREI Infra Finance NCD July 2015 worth investing. The SREI Infra Finance NCD July 2015 Note sets the NCD expectations in systematic way which tells you if SREI Infra Finance NCD July 2015 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in SREI Infra Finance NCD July 2015 by providing NCD recommendations i.e. subscribe, avoid and neutral.

SREI Infra NCD Tranche 2 Issue review - Jul 2015 (Apply)

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