By K. Ashwin Mob: 00919920183006 E-mail: email@example.com
Shriram Transport Finance Company Limited (STFC), one of the largest asset financing NBFCs in India, plans to enter the debt capital market on October 7, 2013 with a public issue of Secured Redeemable Non-Convertible Debentures (NCDs) of face value of Rs.1,000 each. The NCD issue is aggregating upto Rs. 25,000 lacs (Rs. 250 crores) with an option to retin over-subscription up to Rs.25,000 lacs (Rs. 250 crores) for issuance of aditional NCDs aggregating to a total of up to Rs.50,000 lacs (Rs. 500 crores).
The NCDs proposed to be issued under this Issue have been rated ‘CRISIL AA/Stable’ by CRISIL and ‘CARE AA+’ by CARE. The rating of the NCDs by CRISIL indicates high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk, while the rating of NCDs by CARE indicates high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk. The NCDs offered are proposed to be listed on the National Stock Exchange of India Limited and BSE Limited.
These NCDs, bearing a fixed rate of interest, are being offered under six different Series:
The coupon rate for Series I, Series II and Series III having tenure of 36 months, 60 months and 84 months, respectively, shall be 10.75% p.a., payable annually. However, on any record date Individuals shall receive an additional incentive of 0.50% p.a. for Series I, 0.75% p.a. for Series II, 1% p.a. for Series III, aggregating upto 11.25% p.a., 11.50% p.a. and 11.75% p.a., respectively.
Series IV, Series V and Series VI NCDs shall be redeemable at a premium, at the end of 36 months, 60 months and 84 months, respectively, from the Deemed Date of Allotment.
The effective yield for Series IV, Series V and Series VI NCDs shall be 10.75% p.a. for Non-Individuals and 11.25% p.a., 11.50% p.a. and 11.75% p.a., respectively for Individuals.
High Net-worth Individuals and Retail Individual Investors are collectively referred to as “Individuals”.
The Issue shall be open for subscription from October7, 2013 to October 21, 2013 with an option to close on such earlier date or extended date up to a period as may be decided at the discretion of the duly authorised committee of Directors of the Company subject to necessary approvals. Investors have an option for Allotment of NCDs in both dematerialized form and/or physical form (Investors are eligible to receive NCDs in physical mode at their option pursuant to clarification received in this regard from SEBI on September 24, 2013 for this Issue). The funds raised through this Issue will be used for various financing activities including lending and investments, to repay existing loans and for business operations including capital expenditure and working capital requirements.
JM Financial Institutional Securities Private Limited and A.K. Capital Services Limited are the Lead Managers to the Issue. IDBI Trusteeship Services Limited is the Debenture Trustee, while Integrated Enterprises (India) Limited is the registrar to the Issue.
Capitalized terms not specifically defined above shall have the same meaning as assigned to them in the Prospectus
About Shriram Transport Finance Company Limited
STFC is one of the largest asset financing NBFCs in India, with a primary focus on financing pre-owned commercial vehicles. In addition, the company also provides commercial vehicle finance for new commercial vehicles. It is amongst the leading financing institutions in the organized sector for the commercial vehicle industry in India for FTUs and SRTOs. STFC also provides financing for passenger commercial vehicles, multi-utility vehicles, three wheelers and tractors. In addition, it provides ancillary equipment and vehicle parts finance, such as loans for tyre and engine replacements, and provides working capital facility for FTUs and SRTOs. The company also provides ancillary financial services targeted at commercial vehicle operators such as freight bill discounting and also market co-branded credit cards targeted at commercial vehicle operators in India, thereby providing comprehensive financing solutions to the road logistics industry in India.
STFC was established in 1979 and has a long track record of over three decades in the commercial vehicle financing industry in India. The Company has been registered as a deposit-taking NBFC with the RBI since September 4, 2000 under Section 45IA of the Reserve Bank of India Act, 1934. It is a part of the Shriram group of companies 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 financial products such as life and general insurance products and mutual fund products, as well as a growing presence in other businesses such as property development, engineering projects and information technology.