SREI Infrastructure Finance Ltd (SIFL), a frequent visitor to debt market, is engaged in the business of Infrastructure financing and registered as an Infrastructure Finance Company under the RBI regulations. Infrastructure includes sectors like Transport, Energy, Water Sanitation, Communication, Social & Commercial Infrastructure etc. This is the 9th debt offer from it since 2011.
For repayment of its previous loans and to meet its working capital requirement the company is coming out with a Secured Redeemable Non-Convertible Debentures of Rs. 1000 each for a base amount of Rs. 250 crore with a green shoe option to retain oversubscription to the extent of Rs. 750 crore, making the aggregate size of the offer of Rs. 1000 crore. Minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD thereon, thereafter. It offers interest payments on Cumulative, Monthly and Annual basis and has a coupon rates ranging from 9.08% to 10% and tenure of 400 days, 3 yrs and 5 yrs as per the choice of the investors. Allotment will be made on 'first come - first served' basis and is also available in demat as well as physical mode, however, trading will take place only in demat mode. Issue has already opened for subscription on 07.09.16 and will close on or before 28.09.16. Post allotment the NCDs will be listed on BSE and NSE. This offer is rated as BWR AA+ (Double A plus) by Brickwork Rating, that indicates high degree of safety regarding timely servicing of financial obligations. Post issue SIFL's debt equity ratio will stand enhanced to 5.64 from the present 5.28 times.
Lead managers to this offer are ICICI Securities Ltd., A K Capital Services Ltd., Edelweiss Financial Services Ltd., IIFL Holdings Ltd., Karvy Investor Services Ltd., SREI Capital Markets Ltd., Trust Investment Advisors Pvt Ltd., Yes Securities (India) Ltd. Axis Trustee Services Ltd is the debenture trustee and Karvy Computershare Pvt Ltd is the registrar to the issue.
On performance front, for last three fiscals, on consolidated basis the company has shown static top line with sliding bottom lines. Its total income/net profits were Rs. 3260.30 cr. / Rs. 138.51 cr. (FY14), Rs. 3360.32 cr. / Rs. 130.02 cr. (FY15) and Rs. 3261.94 cr. / Rs. 72.52 cr. (FY16). However, things are now expected to improve with major thrust on infra developments by the Government.
Review By Dilip Davda on November 22, 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.
