Home / News / India /  U GRO Capital’s NCD issue offers effective yield of up to 11.01%

U GRO Capital’s NCD issue offers effective yield of up to 11.01%

Net proceeds of the issue will be utilized for the purpose of onward lending, repayment of interest and principal of existing borrowings and for general corporate purposes. (iStockphoto)Premium
Net proceeds of the issue will be utilized for the purpose of onward lending, repayment of interest and principal of existing borrowings and for general corporate purposes. (iStockphoto)

The issue, which will open on 5 September and remain open for subscription till 22 September, has a base size of 50 crore with an option to retain oversubscription up to 50 crores, aggregating up to 100 crore

Non-banking financial company (NBFC), U GRO Capital Ltd, which focuses on the MSME sector in India, has announced the launch of secured issue of non-convertible debentures (NCDs). The issue is scheduled to open on 5 September, and will remain open for subscription till 22 September.

The issue has a base size of 50 crore with an option to retain oversubscription up to 50 crores, aggregating up to 100 crore.

The issue has been rated A- with a stable outlook by Crisil Ratings Ltd and A+ with a stable outlook by Acuite Ratings and Research Ltd.

As per experts, the ratings mean that these debentures are not as safe as AAA-rated instruments.

The secured bonds are backed by the company’s assets. This issue has tenure of 18 months, 27 months, and 36 months for secured NCDs with the series I, II, III.

Effective yield (per annum) for NCD holders in category I (institutional investors), category II (non-institutional investors), category III (HNI investors) and category IV (retail Individual investors) holders ranges from 10.52% to 11.01%. Interest payments modes are quarterly and monthly.

According to the company, net proceeds of the issue will be utilized for the purpose of onward lending, repayment of interest and principal of existing borrowings and for general corporate purposes.

The face value or the issue price of the NCDs is 1,000 and the minimum application amount is 10,000 (10 NCDs) across all the series.

The lead managers to the issue are Sundae Capital Advisors Pvt Ltd and Tipsons Consultancy Services Pvt Ltd. Link Intime India Pvt Ltd is the registrar and IDBI Trusteeship Services Ltd the debenture trustee to the issue.

The NCDs are proposed to be listed on BSE and the National Stock Exchange of India Ltd (NSE).

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