IIFL Finance, a non-banking financial company (NBFC), has announced that it would raise up to `1,000 crore via public issue of non-convertible debentures (NCDs) for the purpose of business growth and expansion. The bonds offer up to 10.5% yield.
The NBFC, backed by UK-based CDC Group, will issue secured and unsecured redeemable NCDs, for a base amount of `100 crore, with a green-shoe option to retain oversubscription of up to `900 crore, aggregating to a total of `1,000 crore.
IIFL bonds offer a coupon rate of 10.50% per annum for a tenure of 69 months, which is an unsecured category. It also offers 10% per annum for a short tenure of 15 months for the secured category.
The NCDs will be listed on the BSE and National Stock Exchange (NSE) at face value of `1,000 and the minimum application size of `10,000 across all categories. The public issue opens on August 6, 2019 and closes on August 30, 2019, with an option of early closure. The allotment will be made on the first-come, first-served basis.
Corporates and trusts, which are paying minimum alternate tax (MAT), can also invest in the bonds, especially the 15 month tenure, where the rate is very attractive. Given the short-term liquidity tightening, the 15-month bonds are priced at 10% yield for such entities.
Rating agency Crisil has rated the instrument as ‘AA’ with a stable outlook, which indicates low credit risk. Sumit Bali, CEO, IIFL Finance said,“The funds raised will help us in expanding our operation for the underserved population.” Although, the company is getting funds from banks, even as they have turned cautious, through securitisation, but mutual funds have cut down the lending because of the lack of funds, Bali added.
IIFL Finance’s assets under management stood at `35,000 crore at the end of the March quarter, of which 85% is retail. The lender had a gross non-performing asset (GNPA) ratio of 1.9% and a net NPA of 0.6%. Total capital adequacy ratio (CAR) stood at 19.2% at the end of March 2019, including Tier I capital of 16.0%, as against the statutory requirement of 15% and 10%, respectively.
