Shriram Transport’s NCD issue to raise Rs1,500 crore
01 Jul 2014
Commercial vehicle financier Shriram Transport Finance will launch non-convertible debentures worth Rs500 crore and offering an average yield of over 10.71 per cent to retail investors under multiple tenors.
For a three-year bond, the company is offering yearly yield of 11 per cent, while on five-year bond the yield is offered is 11.25 per cent. Senior citizens will get an additional yield of 0.25 per cent per annum across all tenors.
"We have an option to retain subscriptions till Rs3,000 crore. But we will close the issue after we get subscriptions of Rs. 1,500 crore," Shriram Transport managing director and chief executive Umesh Revankar told reporters in Mumbai.
Shriram Transport Finance is the first private company to take the "shelf prospectus" route, wherein a company can file a single prospectus and hit the market with multiple issues.
Investors can choose between the three, five and seven-year tenors and the yields offered range from 10.71 per cent for a five-year investment under the monthly coupon option, to 11.50 per cent for a 7-year investment under a yearly coupon.
For a three-year bond, the company is offering a yearly yield of 11 per cent, while on five-year bond the yield is offered is 11.25 per cent.
Senior citizens will get an additional yield of 0.25 per cent per annum across all tenors.
The issue is open between 2 July and 22 July, but may be closed whenever the company feels.
Fifty per cent of the issue is reserved for the retail investors, and 30 per cent is for high net-worth individuals, while the rest is divided between institutional investors.
Proceeds of the issue will be used both for retiring existing debt and funding ongoing lending activities, said its chief financial officer Parag Sharma.
He said the company's overall cost of funds is at 10.75 per cent and the leverage does not exceed six times.
During the fiscal the company will focus on expanding its automall and used construction equipment verticals, Revankar said, adding that the commercial vehicles segment is expected to pick up post monsoons once demand from the mining sector comes in.
