Shriram Transport Finance NCD issue opens; up to 9.5% interest on offer; check details

By: | Published: June 27, 2018 2:16 PM

Shriram Transport Finance said the funds raised will be used for onward lending, financing, and for repayment/prepayment of interest and principal of existing borrowings of the company and for general corporate purposes.

Shriram Transport Finance Company’s public issue of five crore secured redeemable non-convertible debentures (NCDs) has opened for subscription today.

Shriram Transport Finance Company’s public issue of five crore secured redeemable non-convertible debentures (NCDs) has opened for subscription today. Shriram Transport Finance is one of the largest asset financing Non-Banking Financial Company (NBFCs) in the country with a primary focus on financing pre-owned commercial vehicles.  Shriram Transport Finance has proposed to raise Rs 5,000 crore through this issue.

In a statement, the company said that the funds raised will be used for onward lending, financing, and for repayment/prepayment of interest and principal of existing borrowings of the company and for general corporate purposes. The proposed NCDs under this issue have been rated ‘CRISIL AA+/Stable’ by CRISIL and ‘IND AA+: Outlook Stable’ by India Ratings and Research for an amount of upto Rs. 5,000 crore, which indicate high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk.

Here are the key things that you need to know about the public offer:

  1. The company is offering 5,00,00,000 NCDs for subscription of face value of Rs. 1,000 each aggregating to Rs. 5,000 crore. The base issue consists of one crore NCDs of face values of Rs 1,000 each aggregating to Rs 1,000 crore with an option to retain over-subscription upto the shelf limit of Rs. 5,000 crore.
  2. The issue will close on July 20, 2018, with an option of early closure, subject to the base issue size being fully subscribed prior to such early closure and/or extension.
  3. Options of investment tenors are 3, 5 and 10 years, with coupon of 9.10% per annum, 9.30% p.a. and 9.40% p.a. respectively with monthly, annual and cumulative payment options.
  4. The NCDs are being offered under seven different series: Series I and II are monthly options, having tenure of 5 years and 10 years respectively, and the Coupon shall be 8.93% p.a., 9.03% p.a. respectively. Series III, Series IV and Series V are payable annually, having tenure of 3 years, 5 years and 10 years, respectively, and the coupon shall be 9.10% p.a., 9.30% p.a. and 9.40% p.a. respectively. Series VI and VII are cumulative options, where face value and interest accrued are paid at the end of the tenure. Effective yield shall be 9.10% p.a., 9.30% p.a. Respectively.
  5. Additional incentive of 0.10% p.a for the individual investors across all series. Further, senior citizens (initial allottees) are entitled to additional incentive of 0.25% per annum across all series i.e 0.35%.
  6.  The lead managers to the issue are Axis Bank, AK Capital Services, Edelweiss Financial Services, JM Financial Services, and Trust Investment Advisors. Catalyst Trusteeship Limited is the Debenture Trustee to the issue, while Integrated Registry Management Services Private Limited is the registrar to the issue.

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