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NBFCs to raise funds by issuing NCDs

India Infoline Finance will raise up to Rs. 5 billion by issuing NCDs

August 29, 2012 3:40 IST | India Infoline News Service
Four non-bank financial companies (NBFCs) have filed draft prospectus to raise money by issuing non convertible debentures (NCDs).

The NBFCs include India Infoline Finance, Religare Finvest, Muthoot Finance, Shriram City Union Finance. India Infoline Finance, a subsidiary of the India Infoline group, will raise up to Rs. 5 billion by issuing NCDs. Each NCD will have a face value of Rs. 1,000 and tenure of 72 months. The NCDs will be in the nature of subordinated debt and will be eligible for Tier-II capital.

The NCDs are proposed to be listed on National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE). The issue, which has an AA- rating by ICRA and CRISIL, opens on 5th September, and closes on 18th September, the document showed.

Religare Finvest, a subsidiary of Religare Enterprises, will issue secured NCD of face value Rs. 1,000 each, aggregating up to Rs. 2.5 billion with an option to retain over subscription up to Rs. 2.5 billion for issuance of additional NCDs aggregating to a total up to Rs. 5 billion. The tenure of these NCDs ranges from 36 months to 60 months.

The proceeds of the issue would be used to support Religare Finvest various financing activities, including lending and investments. Funds would also be used to repay the company’s existing debt and to meet its capital expenditure and working capital requirements.

Muthoot Finance, a gold loan company, is also tapping financial markets to raise up to Rs. 5 billion by issues NCD of face value Rs. 1,000 each. The issue is expected to be launched in September.

Shriram City Union Finance too is planning to issue secured NCD of face value Rs. 1,000 each, aggregating up to Rs. 2.5 billion with an option to retain over subscription up to Rs. 2.5 billion for issuance of additional NCDs aggregating to a total up to Rs. 5 billion. The NCD will have a face value of Rs 1,000 and tenure of 36 months to 60 months. The objective of the issue is to diversify the resource profile of the company as well as to seek wider participation from retail investors.

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