In its maiden NCD issue, Tata Capital’s flagship lending arm, Tata Capital Financial Services, looks raise up to Rs 7,500 crore. The NCD (Non-Convertible Debenture) is scheduled to open on September 10th. Applications can be made in multiples of Rs 1,000 and the minimum subscription amount has been set at Rs 10,000. The money raised through the issue will be primarily used for on-lending to business. The bond sale has dedicated allotments to institutional buyers, corporates, high net individuals and retail investors.
Notably, the NCD has an attractive rate of interest up to 9.1% per annum. The NCDs come with varying tenures of 3, 5 and 10 years, with interest rates ranging from 8.7-9.1%. For the retail investors, the company said that 30% of the total issue size is reserved. Notaly, the retail investors can invest up to Rs 10 lakhs. The minimum application must be for 10 NCDs followed by in lots of one NCD. Allotment will be made on “first come-first served” basis, ad the issue will close on or before 21st September.
Notably, the NCD bonds would be listed on BSE/NSE, making these liquid investments. NRI’s cannot apply to this NCD subscription. The base issue size is Rs 2,000 Crores with an option to retain oversubscription up to Rs 7,500 Crores. Edelweiss Financial Services, A.K. Capital Services and Axis Bank are Lead managers to the issue. Interestingly, for 3 Years Secured NCD, the interest rate is fixed at 8.8% per annum. For 5 Years Secured NCD, the rate is fixed at 8.9% per annum. Notably, the higher interest of 9.1% is applicable on 10-year unsecured NCDs.
The Secured NCDs have been rated by Crisil as CRISIL AAA/Stable. The Secured NCDs have been rated by CARE as CARE AAA/Stable. The company clocked a post tax net profit of Rs 483 crore for fiscal year 2017-18, and was also able to get down the gross non-performing assets ratio to 3.32%, from the 4.94% in the year-ago period.