Religare Finvest Limited – NCD Details & Review
12.50% return on 5 year secured NCD from Religare Finvest seems attractive for retail investors. The issue is opening on 14th Sep (on first come first served basis) and offering rates better than recent NCDs of Muthoot Finance (12%) & Shriram City Union (11.75%)
Religare Finvest Limited, a subsidiary of Religare Enterprises Limited intends to raise Rs 500 crore from the capital market through its public issue of Secured Redeemable Non-Convertible Debentures. This NCD is offering yield upto 12.6%.
About the Company
Religare Finvest Limited is subsidiary of Religare Enterprises Limited (REL), a diversified financial services company. It is a Non-Deposit Accepting NBFC, focusing on small and medium enterprises (SME) financing and retail capital market financing. It provide loans to corporates and do corporate auto leases. Its leading products includes Loan against property, commercial assets, marketable securities, Working capital loans.
Loan Book Size as on 31 Mar 2012 – Rs 12574 crores & Net NPA – 0.51%. Net worth – Rs 2080 crore.
The Company benefits from the guidance it receives from the highly experienced and professionally managed Board of our promoter company, REL. REL and Religare Group entities also benefit from the strong commitment from their promoters, inter alia including individual promoters, Mr. Malvinder Mohan Singh and Mr. Shivinder Mohan Singh.
Financials
In 2011-2012, the Company has revenue of Rs 1858 crore and Profit after tax is Rs 137 crore. Tts loan book stood at Rs 12,573.5 crore.
The Capital Adequacy ratio (CAR) stood at above 19%.
Issue Details
The issue will open on 14th Sep 2012, and closes on 27th Sep . Minimum Application amount is Rs 10000 and in multiples of Rs 1000 thereafter. Allotment will be done on First-come-first serve basis.
Size of Issue
It is public issue of secured, redeemable, non-convertible debentures (NCDs) of face value of Rs 1,000 each aggregating upto Rs 250 crore with an option to retain oversubscription upto Rs 250 crore, aggregating to a total of upto Rs 500 crore.
Rating
The NCDs proposed to be issued under this Issue have been rated AA-/Stable by CARE and AA- /Stable by ICRA for an amount of upto Rs 500 crore.
Use of funds
The net proceeds of the Issue will be used for various financing activities including lending and investments, subject to applicable statutory and/or regulatory requirements, to repay our existing debt and towards our business operations including for our capital expenditure and working capital requirements.
Listing
The NCDs offered through the prospectus are proposed to be listed on BSE Limited and National Stock Exchange of India Limited.
Summary
12.50% return on 5 year secured NCD seems attractive for retail investors. The rates offered are better than recent NCDs of Muthoot Finance & Shriram City Union.
You can consider investing in this if you can take on moderate risk, but don’t over allocate Even though the NCD is secured, there is a risk of non-payment by issuer.
If you have any queries regarding the safety, liquidity, returns etc of NCD, please leave a comment below .