BackIIFL Finance decides to close NCD issue early on 18 March
The Fairfax and CDC Group-backed IIFL Finance will issue unsecured redeemable NCDs, with a base of ₹100 crore, and a green-shoe option to retain over-subscription up to ₹900 crore
PremiumIIFL Finance Ltd said on Saturday that its non-convertible debenture (NCD) issue will close on 18 March instead of 23 March, as planned earlier.
"The bonds, which offer up to 10.03% yield for a tenor of 87 months, have already been subscribed for ₹468.3 crores and aims to raise ₹1000 crore earlier than expected due to good response from investors across the country, the company said.
The Fairfax and CDC Group-backed IIFL Finance will issue unsecured redeemable NCDs, with a base of ₹100 crore, and a green-shoe option to retain over-subscription up to ₹900 crore (aggregating to a total of ₹1,000 crore).
The NCD is available in various options like monthly, annual and at maturity.
"In the current scenario, the rate of interest offered by IIFL Finance bonds is very attractive compared with other debt products. Liquid funds offer average net yields of 2.8%-3%, ultra-short-term funds offer average net yields of around 3-3.5%., short-term funds offer an average net yield is around 4%-4.25%, while banks are currently offering an interest of around 5.1% for three year fixed deposit," said the company.
"The 10.03% rate is also getting locked in for 87 months. This is a big advantage as liquidity eases post-Covid world for the next few years, most experts believe that interest rates can head down and to lock-in a good interest rate is a big advantage. Today the interest rates on 10-year government securities are at 6%. IIFL has an impeccable track record of more than 25 years and all the bond issues and the debt obligations have always been paid on time," it added.
The credit rating has been AA by Crisil and AA+ by Brickwork. Through the crisis, credit rating of IIFL Finance has been reaffirmed by agencies, which indicates that the instruments are considered to have a high degree of safety for timely servicing of financial obligations and carry very low credit risk.
“The public issue of bonds by IIFL Finance has seen a good response from across categories of investors. The funds raised will be used for meeting credit need of the underserved population, who form the majority of our customers," Rajesh Rajak, CFO, IIFL Finance said.
About IIFL
IIFL Finance is one of India’s largest retail-focused financial services companies. IIFL Finance’s Loan Assets under Management is ₹42,264 crore. Most importantly, 90% of the book is retail - which is focused on small-ticket loans.
IIFL Finance had a gross NPA of 1.61% and Net NPA of 0.77%. Total Capital Adequacy Ratio (CAR) stood at 21.4% at the end of December 2020, including Tier I capital of 18.0%, as against the statutory requirement of 15% and 10% respectively. In Q3 FY21, IIFL Finance reported a profit after tax of ₹268 crore, up 47% on year with a robust return on equity of 18.4%. It has a strong relationship with multiple banks and financial institutions.
The lead managers to the issue are Edelweiss Financial Services Limited, IIFL Securities Limited and Equirus Capital Private Limited. The NCDs will be listed on the BSE Limited and National Stock Exchange of India Limited (NSE), to provide liquidity to investors. The IIFL Bonds would be issued at a face value of ₹1,000 and the minimum application size is ₹10,000 across all categories.
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