India Infoline Finance Limited to launch a Public Issue of Secured Redeemable Non-Convertible Debentures (NCDs) up to Rs 10,500 million on
India Infoline Finance Limited (“Company” or “Issuer”), an NBFC subsidiary of India Infoline Limited, will launch a Public Issue of Secured Redeemable Non-Convertible Debentures of face value of Rs 1,000 each (“NCDs”) aggregating up to Rs 5,250 million (“Base Issue Size”), with an option to retain oversubscription up to Rs 5,250 million, aggregating to a total upto Rs 10,500 million (the “Over all Issue Size”), on .
The NCDs have an option of monthly and annual interest payment and the yield works out to 12.68% p.a. for the monthly interest option and 12%p.a. for the annual interest option. The face value of NCD is Rs. 1,000 and minimum application is Rs. 5,000 (5 NCDs). The NCDs have an investment horizon of 3 years and 5 years. The issue closes on .
Mr R Venkataraman – Managing Director, India Infoline Group, said “We have successfully maintained a low level of net NPA, which reflects our robust credit appraisal processes and internal control systems, even in this challenging economic environment. We are offering an attractive yield of 12.68% p.a. on the monthly interest option. This is an excellent investment opportunity with a time frame of 3 to 5 years. In both our previous issues, we received an overwhelming response from retail investors and hence we have designed the offering suited for the needs of the retail investor.”
The NCDs proposed under this Issue have been rated ‘CARE AA’[Double A] by CARE and ‘BWR AA (Outlook:Stable)' by Brickwork. The rating indicates instruments are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
The NCDs will be listed on National Stock Exchange of India Limited (“NSE”) and BSE Limited (“BSE”) and will have a tradable lot size of 1 NCD.
The Lead Managers to the issue are Axis Capital Limited, India Infoline Limited, Trust Investment Advisors Private Limited and IDBI Capital Market Services Limited. The Co-Lead Managers to the Issue are RR Investors Capital Services (P) Limited, Karvy Investor Services Limited and SMC Capitals Limited.
A detailed prospectus is released and available on the website of the Company at www.iiflfinance.com; and websites of NSE and BSE at www.nseindia.com; www.bseindia.com respectively and on the respective websites of the Lead Managers atwww.axiscapital.co.in, www.iiflcap.com, www.trustgroup.co.in, www.idbicapital.com and Co-Lead Managers atwww.rrfinance.com/rrfcl.com, www.karvy.com, www. smccapitals.com and www.idbitrustee.co.in
Key strengths of IIFL as highlighted in the prospectus are as follows:
Our Parentage: India Infoline Finance Ltd benefits extensively from its Promoter, IIFL, which is a diversified financial services company with a pan-India presence.
Consistent low level of NPAs: The quality of our loan portfolio is reflected in the consistent low level of NPAs. As on March 31, 2013 on a consolidated basis our net NPA constituted 0.17% of our Loan Book, as compared to 0.40 % of our Loan Book as on March 31, 2012. As on March 31, 2013 on a consolidated basis our Gross NPA constituted 0.49% of our Loan Book, as compared to 0.56 % of our Loan Book as on March 31, 2012. As on June, 2013 on a consolidated basis, net NPA constituted 0.24% of loan book and gross NPA constituted 0.58% of loan book.
Adequately capitalized to fund growth: As part of our governance policy, we ordinarily maintain capital adequacy higher than statutorily prescribed Capital Adequacy Ratio (CAR). As of June 30, 2013 and March 31, 2013 our capital adequacy ratio computed on the basis of applicable RBI requirement was 21.10 % and 21.60% as compared to a minimum of capital adequacy requirement of 15% stipulated by RBI for FY13.
Access to cost effective funding sources: We have been able to achieve a relatively stable cost of funds despite the difficult conditions in the global and Indian economy and the resultant reduced liquidity and an increase in interest rates, primarily due to our improved credit ratings, effective treasury management and innovative fund raising programs. We believe we are able to borrow from a range of sources at competitive rates.
Well Defined Processes: Our well defined business processes ensure complete independence of function and segregation of responsibilities. Our robust credit approval and credit control processes, centralized operations unit, independent audit unit for checking compliance with the prescribed policies and approving all loans at transaction level (except for gold loans where it is above `100,000) and risk management processes and policies provide for multiple checks and verifications for both legal and technical parameters, including collateral valuation and title search, document verification and fraud and KYC check, personal meetings with clients and audit before disbursement of loans.
Access to Extensive Distribution and Branch Network: We have access to the pan India branch and distribution network of IIFL Group especially for our Mortgage Loans, Capital Market Finance and Healthcare Finance businesses. The Healthcare Finance and Mortgage Loan businesses are now integrating with the Gold Loan Branch Network based on the credit experience of the locations and competition presence and performance. We as on June 30, 2013 had 1,403 branches.
Experienced Management Team: The Board of Directors comprises of 7 directors with significant experience in the banking and finance sector. Our management organization structure is designed to support each product line by a dedicated team of executives with substantial experience in their particular business segment.
Technology, Analytics and Credit bureau usage: We believe that our robust loan management system, analytic ability & extensive usage of the credit bureau and other allied KYC procedures offers us a significant competitive advantage. Our systems have the capability of end to end customer data capture, computation of income, margin monitoring, collateral data capture, and repayment management. Our loan approval is controlled by the loan application system. Technology gives us the ability to integrate cash flows in real time and allows us better informed decision making with instantaneous access to record and information.
About India Infoline Finance Limited
India Infoline Finance Limited (IIFL) is a systemically important non-deposit taking NBFC focusing on Mortgage Loans, Commercial Vehicle Finance, Gold Loan, Capital Market Finance and Healthcare Finance. It offers a broad suite of lending and other financial products to both retail and corporate clients. Its lending and other financial products include: Mortgage Loans, which includes Housing Loans and Loans against Property; Commercial Vehicle Finance; Gold Loans; Capital Market Finance; and Healthcare Finance/Medical Equipment Finance. As on March 31, 2013, Mortgage Loans accounted for 41.17% of the Loan Book; Capital Market Finance accounted for 13.52% of the Loan Book; Health Care Finance accounted for 3.28%; and Gold Loans accounted for 41.23% of Loan Book. Vehicle Finance is a recent product which has been introduced in FY 2013 and accounted for 0.79% of the Loan Book. As on June 30, 2013, it has a total of 1,403 branches. The company’s consolidated income from operations and PAT witnessed a CAGR of 98.3% and 51.9% respectively over the last three years from FY10 to FY13. The loan book of the company has witnessed a CAGR of 79.3 % over the last three years.
As on March 31, 2013 on a consolidated basis, the Company’s net NPA constituted 0.17% of the Loan Book, as compared to 0.40 % of its Loan Book as on March 31, 2012. As on March 31, 2013 on a consolidated basis, its Gross NPA constituted 0.49% of our Loan Book, as compared to 0.56 % of its Loan Book as on March 31, 2012. As on June, 2013 on a consolidated basis, net NPA constituted 0.24% of loan book and gross NPA constituted 0.58% of loan book.
As part of the Company’s governance policy, it maintains capital adequacy higher than statutorily prescribed CAR. As of June 30, 2013 and March 31, 2013, its capital adequacy ratio computed on the basis of applicable RBI requirement was 21.10 % and 21.60% as compared to a minimum of capital adequacy requirement of 15% stipulated by RBI for FY13.
India Infoline Finance Limited’s promoter, India Infoline Limited, is a diversified financial services organization having presence across India. The global footprint of IIFL extends across geographies with offices in New York, London, Geneva, Hong Kong, Singapore, Dubai, Mauritius and Colombo. It is listed on BSE and NSE. IIFL Group’s services and products include retail broking, institutional equities, commodities and currency broking, wealth advisory, credit & finance, insurance broking, asset management, financial products distribution & investment banking. The products/ services portfolio of IIFL caters to the diverse investment and strategic requirements of retail, institutional, corporate and affluent clients. As on March 31, 2013, IIFL Group had presence in 3,801 business locations spread across 844 cities and towns and 28 states and union territories in India. It leverages extensively on the infrastructure, distribution network and insights of IIFL Group into market and customer needs. Over the past several years, it has expanded its presence into markets that are of greater relevance to the products IIFL offers. Portfolio performance and profitability are the factors that drive the branch network.