Showing posts with label Secured Non Convertible Debenture Issue. Show all posts
Showing posts with label Secured Non Convertible Debenture Issue. Show all posts

Friday, April 18, 2014

SHRIRAM CITI UNION FINANCE LIMITED: NCD Offer

SHRIRAM CITI UNION FINANCE LIMITED: NCD Offer


If you willing earn more than bank fix deposit then this NCD for you. Obviously you would have to take more risk for that. Shriram Citi Union Finance Ltd is an NBFC and part of the reputed Shriram group of companies. It offers loan to the small enterprise, provides  loan against gold, financing for two wheeler and other commercial goods segment. It is the market leader of small loan segment in financial year 2013 with the estimated market share of 41.6%.

The company has come with public offer secured NCD of face value of Rs 1,000 each. The total size of issue is Rs 20,000 lakh. The 40% of issue is reserve for retail investor category. The retail category investment limit is up to Rs 5 lakh. The minimum application size is Rs 10,000 (10 NCD). The NCD would be listed on BSE. It would be available in both mode physical and demat form.

If you have invested Rs 10,000 in this NCD, you will get the below mentioned amount at the end of the term.


24 Month
36 Month
60 Month
Rs 12,321
Rs 13,862
Rs 17,427.60


It means the effective yield per annum would be 11% for 24 months, 11.50% for 36 months and 11.75% for 60 months.

Taxation:

A listed debenture is treated as a long term capital asset if you hold it more than 1 year from the date of allotment. The long term capital gain would be 10% if calculate without indexation and would be 20% if use indexation method.
Rating agency CARE has given it AA rating. Investor may choose this to allocate some part of their investment portfolio. 

If you want more information regarding investment or you have any other query about investment feel free to ask us.

Warm regards,

Arvind Trivedi
Certified Financial Planner
www.arvindtrivedicfp.blogspot.in

Monday, October 7, 2013

Shriram Transport Finance Company Limited NCD issue

Today Shriram Transport Finance Company Limited (STFCL) have  launched  its public issue of non-convertible debentures (NCDs). The current issue will get closed in a couple of weeks time on October 21st, if it does not get preclosed this time again or extended by the company beyond this date. The company plans to raise Rs. 500 crore with this issue, including a green-shoe option of Rs. 250 crore.
This is the second such public issue of this financial year from STFC, as the company raised Rs. 750 crore from its first issue in July and the issue had got preclosed in just seven days time on July 24th.

Shriram Transport Finance offered 10.90% per annum for 36 months and 11.15% per annum for 60 months in its last issue to the individual investors. This time the rates are 35 basis points (or 0.35%) higher at 11.25% per annum for 36 months and 11.50% per annum for 60 months. The company did not offer 84 months option in its first issue. There is no monthly interest option this time.

Here you have the table having the details about the tenors and the interest
rate options with cumulative and non cumulative option.


As you can check from the table above, there is an additional incentive of 0.50% p.a. with 36 months option, 0.75% p.a. with 60 months option and 1% p.a. with 84 months option. Unlike tax-free bonds, this additional incentive is available to the individual investors irrespective of the size of their investment amount.


Categories of Investors - The investors have been classified in the following four categories and the individual investors fall in Category III as well as Category IV.
§  Category I – Institutional Investors
§  Category II – Non-Institutional Investors
§  Category III – High Net-Worth Individuals, including Hindu Undivided   Families (HUFs)
§  Category IV – Retail Individual Investors, including Hindu Undivided    Families (HUFs)
Non-Resident Indians (NRIs), foreign nationals and qualified foreign
investors (QFIs) among others are not eligible to invest in this issue.

Allocation Ratio - 50% of the issue is reserved for the Retail Individual Investors. The individual investor  can invest up to Rs. 5 lakh and 30% of the issue is reserved for the High Net-Worth Individual Investors. 10% of the issue is reserved for the Institutional Investors and the remaining 10% is for the Non-Institutional Investors (NIIs). The allotment will be made on a “first come first serve” basis.

Minimum Investment - The company has decided to keep the minimum investment requirement is  Rs. 10,000 again The face value of bond is  Rs. 1,000 each.

Listing - STFC will get these bonds listed on the National Stock Exchange (NSE) as well as the Bombay Stock Exchange (BSE). Investors can apply for these bonds either in physical form or in demat form. The company will get the NCDs allotted and listed within 9 working days from the date of closure of the issue.

Rating & Nature of the NCDs - CRISIL has rated these NCDs as ‘AA/Stable’ and CARE has assigned a rating of ‘AA+’ to this issue. Moreover, these NCDs are ‘Secured’ by a first charge on an identified immovable property and specified future receivables of the company.

Taxability & TDS - The interest earned on these NCDs will be taxable as per the tax slab of the investors. TDS will be applicable if the NCDs are taken in the physical form and the interest amount exceeds Rs. 5,000 in a financial year. But, if you take these NCDs in your demat account, the company will not deduct any TDS from the interest income.

Interest on Application Money & Refund - Investors will get interest on their application money @ 9% p.a., from the date of investment till the deemed date of allotment, and @ 4% p.a. on the amount liable to be refunded.

Interest Payment Date & Record Date - STFC will make its first interest payment on April 1, 2014 and then on April 1st every year. The record date will be 15 days prior to every interest payment date.


IIFL NCDs Issue vs. STFC NCDs Issue vs. HUDCO Tax-Free Bonds



The business model of Shriram Transport Finance is good and its credit rating also suggests that.  If you want to go with this issue, prefer short term period instead of long term period.

The investors falling in the higher tax brackets should opt for tax-free bonds rather than these taxable NCDs. So, personally I would go for HUDCO tax-free bonds or the upcoming IIFCL tax-free bonds rather than these STFC NCDs.

If you don’t fall in any tax bracket or fall in 10% tax bracket then you can consider this issue.

For more detail about any other query related investment, you can contact me through my email.
Regards,
Arvind Trivedi
Certified Financial Planner


Wednesday, September 12, 2012


Shriram City Union Finance Limited
SECURED Non Convertible Debenture Issue
Rating: AA- from CRISIL
.

For 36Months
Particulars
Coupon (%)
 Individuals
11.50%
Non Individuals
10.60%

For 60Months
Particulars
Coupon (%)
Individuals
11.75%
Non Individuals
10.75%

About Shriram City Union Finance Limited

Shriram City Union Finance Limited is a deposit-accepting NBFC registered with RBI. Established in 1986 and with a track record of more than twenty five years in the financial services sector, it is also one of the largest small enterprise finance company in India.

Key Strength
  1. Company has track record of more than 25years in financial services and has pan india presence, with 575 branches.
  2. Growth in Assets under management (AUM) from 226,889.78lacs in FY08 to Rs1,242,103.98lacs in FY12 ; growing at a CAGR of 41.30%.
  3. Diversified product portfolio:
    1. 11.60% of AUM comprised of product finance loans.
    2. 18.33% comprised of Vehicle loans.
    3. 5.23% comprised of personal loans.
    4. 15.46% comprised loans against gold.
    5. 19.99% loans to the small enterprises finance segment collateralized by gold.
    6. 29.39% comprised loans to small enterprise finance segment.
  4. Company has an experienced senior management team and a board with extensive experience in the financial services sector.
  5. Largest small enterprise finance company in india with a dominant market share of 95% in the small loan segment (loans of Rs1lacs -Rs10lacs).
  6. Company also leads the total india micro, small and medium enterprises market with 53% share.
  7. Company is a part of the Shriram group; which has a strong presence in financial services in india; including commercial vehicle financing, consumer finance, life and general insurance, stock broking, chit funds and distribution of life and general insurance product and mutual fund products.
The Issue
Public Issue by our Company of NCDs aggregating upto Rs. 250 Crores with an option to retain over-subscription upto Rs. 250 Crores for issuance of additional NCDs aggregating to a total of upto Rs. 500 Crores. The NCDs will be secured in nature and Security for the purpose of this issue will be created in accordance with the terms of the Debenture Trust Deed.

Objects of the Issue
The funds raised through this Issue will be used to finance company's business operations, lending, investments, repay existing loans, business operations including capital expenditure, working capital requirements, meeting expenses of the Issue.
ISSUE DETAILS:

Issue Opens
12th Sept, 2012
Issue Closes
26th Sept, 2012
Tenure
36 Months & 60 Months
Rating
AA- from CRISIL & CARE
Face Value
Rs. 1,000 each
Listing
NSE & BSE
Issuance & Trading
Compulsorily in Dematerialized form
Min. Application
Rs. 10,000 (10 NCDs of Rs. 1,000 each)
Trustees for NCDs
GDA Trusteeship Ltd.

KEY FINANCIAL F IGURES (Rs. in Lacs)
Particulars
FY2010
FY2011
FY2012
AUM
521,550
799,805
1,343,104
Net Worth
100,000
121,207
172,390
Total Income
110,790
132,345
205,641
Net PAT
19,426
24,059
34,253

KEY FINANCIAL RATIOS (%)
Particulars
FY2010
FY2011
FY2012
Gross NPA
2.27%
1.86%
1.55%
Net NPA
0.71%
0.43%
0.38%
CAR
26.28%
20.53%
17.40%

Comparison to Bank & Company FD
Post Tax Return under Tax Slab
Option
Interest Rate
30.00%
20.00%
10.00%
Bank FD
9.25%
6.48%
7.40%
8.33%
Company FD
10.50%
7.35%
8.40%
9.45%
SCUF NCD*
11.75%
8.23%
9.40%
10.58%
Source: Bank FD rates of ICICI Bank for 5 years and Company FD rates of Mahindra Finance.
* SCUFL rates of 60 month Cumulative option, series IV (for Individual).

Why should one invest..?

The issue available in four series offers an added incentive in coupon for individual investors taking it to the coupon rate of 11.50% and 11.75% for 36 and 60 Months, respectively. Also, the issue being a SECURED one and a decent Credit Rating are an added advantage. However, NCDs are not guaranteed investments like those of Bank FDs and thus one should balance the portfolio's exposure towards such issues after properly analyzing the risk factors.

The additional incentive above 10.60% for 36 Months and 10.75% 60 Months of 0.90% and 1.00% respectively, for Individual Investors is an attractive option. Also, with the option of Cumulative one can lock-in the high yield for a longer duration (5 Years) with the reinvestment at the same rate. With the issue being secured the effective yield of 11.50% for 36 Months and 11.75% 60 Months is a good opportunity for individual investors.

Regards,
Arvind Trivedi
Certified Financial Planner