Shriram City Union Finance NCD Issue opens
Effective Yields ranging from 12.27% pa to 14.46% pa
Mumbai, November 21, 2013: Leading retail-financing NBFC Shriram City Union Finance Ltd. proposes to open on , a public issue of Non-convertible Debentures (“NCDs”) of Rs. 100 Crores (with an option to retain oversubscription to the extent of another Rs. 100 Crores).
Options of investment tenors are three, four and five years, with coupons of 11% p.a., 11.25% p.a. and 11.50% p.a. respectively for individual investors. Interest payment options comprise both Annual and Cumulative, with the latter providing effective yields of 12.27% p.a., 13.30% p.a. and 14.46% p.a. over three, four and five years respectively. Also on offer is a five-year structured NCD carrying a coupon of 11.50% p.a. with an annual interest payout.
Of the Issue size, 80% of the issue is reserved for individuals; 40% being earmarked for retail investors (those investing in less than Rs. 5 Lacs) and 40% for High Networth Individuals (HNIs).
The NCDs are proposed to be listed on BSE and NSE, and hence may be traded.
The Issue offers very attractive yields to the investing public, especially the category of retail investors who have for long formed the core of Shriram City’s partners in success. The proposed public issue by Shriram City follows previous successful forays in the years 2011 and 2012. With the current issue, the company expects to mop up Rs. 100 Crores (with an option to retain oversubscription to the extent of another Rs. 100 Crores) and thereby deepen its reach into the country’s retail investor base.
About Shriram City Union Finance: Shriram City is now in the 27th year of its existence. A deposit-accepting NBFC with multiple product lines, Shriram City is the largest small enterprise finance company in India in the small loan segment (loans between Rs. 1 Lac to Rs. 10 Lacs. Source: “Analysis of Small Loan Credit Market for NBFCs in India – June 2013” by Frost and Sullivan). It is also a prominent provider of loans against gold, financing for two wheelers, pre-owned and new vehicle loans, personal loans and housing loans (the last named product being disbursed through a subsidiary).
Shriram City has a presence in 1,021 branches across India, and as of September 30 2013, had an AUM of Rs. 15,118 Crores. The company clocked a top line of Rs. 799 Crores for the second quarter of Financial Year 2014, and registered a Net Profit of Rs. 127 Crores. Loans disbursed during the quarter were Rs. 3,559 Crores, and Capital Adequacy stood at 23.26% (against the minimum required of 15%)
The company floated its equity IPO in the year 1994, and has, over the years, seen active interest and participation by major Private Equity players. Shriram City also sought – and received - public participation in its debt offerings and issued two series of listed Non-Convertible Debentures in the years 2011 and 2012.
Shriram City possesses a unique business model which is branch-centric, community-led, and relationship-based, and has been developed in-house. The Company is focused on serving the non-corporate component (proprietary units and partnership firms) of the Micro, Small and Medium Enterprise (MSME) segment through small-ticket loans. The company harnesses to best effect its symbiotic relationship with companies within the Shriram group in reaching out to its target market.
For Disclaimer and risk factors please refer to the prospectus uploaded on SEBI and Lead Manager websites…