Mumbai: The non-banking finance firm Religare Finvest, a fully-owned arm of Religare Enterprises, on Monday said it will mobilise up to Rs 800 crore from a bond issue that opens from 9-26 September .
The offer, carrying a face value of Rs 1,000 per bond, includes the base issue size of Rs 400 crore with an option to retain over-subscription up to Rs 400 crore, and is fully secured redeemable non-convertible debentures (NCDs).
“The proceeds from the issue will be used for various financing activities, including lending and investments, repaying our existing debt and for capital expenditure and working capital requirements,” Religare Finvest chief executive Kavi Arora told reporters here.
The Malvinder and Shivinder Mohan Singh brothers promoted company had a net profit of Rs 114 crore for the fiscal ended March 2011 on a sale of Rs 8,967 crore and had one of the lowest bad loans in the industry. While net NPA as of March 2011 stood at 0.02%, it further improved to 0.01% for the June quarter.
The company’s FY11 loan book stood at Rs 8,967 crore, and it had a borrowing of Rs 9,018 crore during the period. As of the June quarter, its balance sheet stood at Rs 9,926 crore with 36% of this coming in from its loans against property business with Rs 3,618 crore.
The issue has an option for early closure or extension as may be decided by the company, Arora said adding bond allocation will be on a first-come-first-serve basis. The issue will be listed on the BSE.
The issue carries an AA-rating with stable outlook from Icra and ‘Care Rating´.
Rating indicates high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk, Group chief financial officer Anil Saxena said.
The issue, with a three-year tenor and a five-year tenor, offers a coupon of 12.1 to 12.50% per annum. The retail investors have a 50% reservation, while 30% is qualified institutional buyers and 20% high net worth individuals, Arora said.
A K Capital Services, Axis Bank, Yes Bank and Religare Capital Markets are the lead managers to the issue, while Link Intime is the registrar to the issue.
As of June quarter, SME finance and retail capital market finance activities accounted for 69% and 16% of its total loan book respectively.
Its SME finance comprises loans against property representing 36% of its total loanbook as of Q1, commercial assets loans (commercial vehicle and construction equipment finance) representing 17% of its total loan book, SME working capital financing and loans against marketable securities represent 8% each of its total loan book as of the June quarter.
The company’s total income and net profit for the last financial year stood at Rs 10,74 crore and Rs 115 crore, respectively, a CAGR of 49.8% and 35.6% respectively.