Shriram Transport Finance plans to raise up to Rs 700 crore via NCDs

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Published: January 4, 2019 2:17:49 AM

The funds raised through the issue will be used for onward lending, financing, and for repayment or prepayment of interest and principal of existing borrowings of the company.

The funds raised through the issue will be used for onward lending, financing, and for repayment or prepayment of interest and principal of existing borrowings of the company.

Shriram Transport Finance Company, the asset financing NBFC with a primary focus on financing pre-owned commercial vehicles, is proposing a public issue of up to `700 crore by issuing secured redeemable non-convertible debentures (NCDs) of face value of `1,000 each. The company is coming out with its tranche 3 issue of NCDs having a base size of `200 crore with an option to retain an additional amount up to `500 crore from oversubscription, aggregating to `700 crore. The issue will open for subscription on January 7 and is scheduled to close on January 31.

The proposed NCDs have been rated ‘Crisil AA+/stable’ by Crisil and ‘IND AA+: outlook stable’ by India Ratings and Research. The ratings indicate high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk, said a release by Shriram Transport. The funds raised through the issue will be used for onward lending, financing, and for repayment or prepayment of interest and principal of existing borrowings of the company.

Options of investment tenures are 3, 5 and 10 years, with monthly, annual and cumulative payment options. The NCDs, bearing a fixed rate of interest are being offered under seven different series. The Series I and II are monthly interest payment options, having tenure of 5 years and 10 years, respectively, and the monthly coupon shall be 9.12% and 9.30% per annum, respectively, which is an annualised yield of 9.50% and 9.70% per annum, respectively. Series III, Series IV and Series V, interest payable annually, having tenure of 3 years, 5 years and 10 years, respectively, and the coupon shall be 9.40%, 9.50% and 9.70% per annum, respectively.

Series VI and VII are cumulative options, having tenure of 3 years and 5 years, respectively, where face value and interest accrued are paid at the end of the tenure and will be redeemed at `1,309.66 and `1,574.63 per NCD, respectively. Effective yield shall be 9.40% and 9.50% per annum, respectively. Additionally, senior citizens (initial allottees) under Category III and Category IV are entitled to additional incentive of 0.25% per annum across all series. Accordingly, the amount payable on redemption to such senior citizens for NCDs under Series VI and Series VII is `1,318.67 and `1,592.70 per NCD, respectively.

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