Reliance Home Finance to raise Rs 3,500 crore via NCDs

India Infoline News Service | Mumbai | December 20, 2016 14:42 IST

The Company proposes to raise Rs 1,000 crore (US$14.7 million), as base issue size, by offering Secured NCDs and Unsecured NCDs at a face value of Rs 1,000 each. The Unsecured NCDs will be in the nature of subordinated debt and will be eligible for inclusion as Upper Tier II Capital.

Reliance Home Finance
Reliance Home Finance Ltd. (RHFL), a 100% subsidiary of Reliance Capital and a part of Anil D. Ambani led Reliance Group, announced its maiden public issue offering Secured Redeemable Non-Convertible Debentures (Secured NCDs) and Unsecured Redeemable Non-Convertible Debentures (Unsecured NCDs).
 
The Company proposes to raise Rs 1,000 crore (US$14.7 million), as base issue size, by offering Secured NCDs and Unsecured NCDs at a face valueof Rs 1,000 each. The Unsecured NCDs will be in the nature of subordinated debt and will be eligible for inclusion as Upper Tier II Capital.
 
The NCDs will be issued in one or more tranches up to the shelf limit, on terms and conditions as set out in the Tranche 1 Prospectus.
 
The Company will use the amount for the purpose of onward lending, financing, and for repayment/ prepayment of interest and principal of existingborrowings and for general corporate purposes.
 
“India's mortgage-to-GDP ratio is still low at 10% in 2015-16 compared with other developing countries but it has improved from 7.4% in 2009-10. The recentpush by the government to provide 'Housing for All' by 2022 and various steps taken to implement the same, are expected to boost sales of affordable andlow-cost housing units and consequently, financing for the same”, said Mr. Ravindra Sudhalkar, CEO, Reliance Home Finance.
 
The Secured NCDs have been rated CARE AA+: Stable by Credit Analysis and Research Limited (CARE) and BWR AA+ Outlook: Stable by BrickworkRatings India Private Limited (Brickwork). These ratings indicate that the instruments are considered to have high degree of safety regarding timelyservicing of financial obligations and carry very low credit risk**.
The Unsecured NCDs have been rated CARE AA:Stable by CARE and BWR AA Outlook: Stable by Brickwork. The ratings indicate that instruments areconsidered to have high degree of safety regarding timely servicing of financial obligations and carry very low credit risk**.
 
The NCDs are being issued to Institutional, Non-Institutional, HNIs and Retail investors for a period of 3 years, 5 years and 10 years for Secured NCDs and15 years for Unsecured NCDs with a call option after 10 years.
 
The coupon rate for the NCDs for respective categories are:
   Category I Category II Category III Category IV
Institutional Investors Non-Institutional Investors HNI Investors Retail Investors
SECURED NCDs
Series I - 3 Years 8.70 8.70 8.90 8.90
Series II- 5 Years 8.90 8.90 9.05 9.05
Series – III 10 Years 9.00 9.00 9.15 9.15
UNSECURED NCDs
Series IV- 15 Years* 9.25 9.25 9.40 9.40
Coupon in % per annum, payable annually.
 
*In the event our company does not exercise the call option after 10 years, a step-up of 25 bps above coupon shall be payable - as detailed in the prospectus.
 
The NCDs are proposed to be listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE).
 
RHFL provides a wide range of loan solutions like Home loans, LAP, Construction finance and Affordable housing. The Company also providesproperty solutions’ services including property valuation, advisory services to real estate developers on debt syndication, fund raising through equity,mergers and acquisitions, etc.
 
For the half year ended September 30, 2016, RHFL disbursements were at Rs 3,342 crore (US$ 492.9 million) and the Assets Under Management were at Rs.9,383 crore (US$ 1.4 billion). The outstanding loan book of RHFL, as on September 30, 2016, was Rs 7,905 crore (US$ 1.17 billion) – with 100% of the loanbook continuing to be secured. The Company has a large footprint and its loan book is spread across 100 locations through 43 branches.
 
The issue is being made pursuant to the provisions of the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,2008 as amended (the “SEBI Debt Regulations”), the Companies Act, 2013 and Rules made thereunder as amended to the extent notified.
 
The Lead Managers to the Issue are: Edelweiss Financial Services Limited, A. K. Capital Services Limited, Axis Bank Limited, Trust Investment AdvisorsPrivate Limited and Yes Securities (India) Limited. The debenture trustee to the issue is IDBI Trusteeship Services Limited and Karvy ComputersharePrivate Limited are registrar to the issue.

***Note: This is a NSE Chart

 

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