Housing finance firm DHFL’s issue of non-convertible debentures was subscribed by over six times on its first day today, generating a demand worth about Rs 12,645 crore.
DHFL’s issue comprises Rs 2,000 crore with an option to retain over-subscription of up to Rs 8,000 crore, aggregating to shelf limit of Rs 10,000 crore.
As per the combined data of BSE and NSE, the issue size was oversubscribed 6.32 times at the end of today’s bidding at 1700 hrs, generating a demand worth Rs 12,645 crore.
“We are overwhelmed with the response shown by the investors on the second consecutive NCD public issue, which is oversubscribed by 6.32 times and has attracted a subscription of around Rs 12,645 crore from investors.
“The success of both our NCDs will has set a benchmark in the Indian capital markets and will further deepen the Indian debt markets with wider public participation. The investors’ confidence is also a reflection of the government’s focus on affordable housing and housing for all policy,” DHFL Managing Director and Chairman Kapil Wadhawan said in a statement. The issue, which opened today, is scheduled to close on September 12.
The portion reserved for qualified institutional buyers (QIBs) portion was subscribed 10.41 times, while the same for non-institutional investors subscribed 5.97 times.
The quota reserved for High Networth Individuals (HNIs), investing over Rs 10 lakh was subscribed 5.55 times and the limit reserved for retail investing, who invest up to Rs 10 lakh witnessed a subscription of 3.13 times.
“Response is overwhelming, particularly from QIB’s, Corporates and HNIs. There is good response from retail investors too. Overall, this signifies that there is large appetite for rated corporate bonds as long as they assure higher interest as compared to bank FD’s and prevailing inflation rates,” said Anil Chopra Group CEO and Director at Bajaj Capital. The net proceeds of the issue will be used for funding loan growth.
This was the company’s second NCD issue. The mortgage lender’s maiden issue, which opened earlier this month, was subscribed nearly 19-times on its first day with an overall subscription of about Rs 19,000 crore.
DHFL’s issue consisted of Rs 1,000 crore with an option to retain over-subscription of up to Rs 3,000 crore, aggregating to shelf limit of Rs 4,000 crore.
The follow-on secured NCD issue has a 7-year tenor with annual frequency of interest payment. The interest rate on proposed NCDs varies between 9.05 per cent to 9.25 per cent.
Edelweiss Financial Services, A K Capital Services, ICICI Bank, SBI Capital Markets, Trust Investment Advisors, Yes Securities, Axis Bank, IndusInd Bank and IIFL Holdings are the lead managers to the issue.