Private sector housing finance company Dewan Housing Finance Corporation Limited (DHFL) will on May 22 open public issue of up to 12 crore secured redeemable non-convertible debentures (NCDs) with a face value of Rs 1,000 each, for Rs 3,000 crore. The issue has an option to retain oversubscription (greenshoe) of up to Rs 9,000 crore, thus aggregating the size up to Rs 12,000 crore.
The issue is scheduled to close on June 4 with an option to early closure or extension as decided by the board of directors of the company and the NCD public issue committee. “These are exciting times for DHFL as it strengthens its commitment to actively expand financial inclusion across India and provide a greater impetus to the government’s mission of housing for all by 2022. The launch of DHFL’s third public issue NCD at this critical phase of growth is set to provide a strong thrust to the company’s growth plans as we progress towards the next phase of high growth. It also allows us to diversify our borrowing portfolio,” said Kapil Wadhwan, chairman and managing director of DHFL.
The NCDs have been rated CARE AAA and BWR AAA; stable for an amount up to Rs 15,000 crore by CARE Ratings and Brickwork Ratings India. Wadhwan further pointed out that the company has introduced floater rate NCD which is benchmarked to overnight MIBOR.
At least 75% of the net proceeds of the Public Issue of NCDs will be used for the purpose of onward lending, financing, and for repayment of interest and principal of existing borrowings of the company which stands at Rs 92,000 crore. A maximum of up to 25% will be used for general corporate purposes.
“Investors in MIBOR linked NCDs will receive interest based on Overnight MIBOR rate published by FBIL compounded daily and payable annually. We are also offering an attractive interest rate of up to 9.10% pa, one-time additional incentive of up to 1.00% to initial subscribers on maturity and an additional interest of 0.10% pa for senior citizens,” adds Wadhwan.
The minimum application amount is Rs 10,000 collectively across all options on NCDs and in multiples of one. Allotment is on a first-come-first-serve basis and investors have an option to apply for NCDs in dematerialised as well as in physical form.
To raise Rs 50,000 cr in FY19
DHFL also plans to raise Rs 50,000 crore through the debt market in the current financial year to support its business growth. “This year, the plan is to raise about Rs 50,000 crore of fresh funding from the debt market. Our lending plan for this financial year is going to be 20% higher than the previous year,” said Wadhawan.