India Infoline Finance (IIFL) on Thursday announced plans to raise up to Rs 2,000 crore through public issue of secured and unsecured non-convertible debentures (NCDs). The company plans to undertake a public issue of NCDs for an amount aggregating up to Rs 250 crore (base issue size), opening on January 22, 2019. The issue will close on February 20.
It will have an option to retain oversubscription of up to Rs 1,750 crore aggregating up to Rs 2,000 crore (tranche I issue).
The face value of the bonds would be Rs 1,000 each and will have a tenure of 39 months to 10 years. Bonds up to five years would be secured, attracting coupons between 9.60% (monthly) and 10% (annual), while unsecured bonds maturing in 10 years will attract yearly coupons of 9.90% (monthly) and 10.35 % (annual). The bonds will have a call option.
Of the total amount raised, at least 75% will be utilised for the purpose of onward lending, financing and for repayment of interest and principal of existing borrowings of IIFL. The rest 25% would be utilised for general corporate purposes.
“Due to uncertainty of equity markets, investors are looking for fixed income. Despite liquidity crises that have happened in the NBFC sector, the demand for credit has not slowed down on a broader time frame. If you look at 2-3-year horizon if the economy has to grow, then the demand for credit has to grow and hence NBFCs will continue to play an important role,” said Nirmal Jain, founder and chairman of IIFL.