In a bid to expand its loan book, India Infoline Investment Services, an NBFC subsidiary of India Infoline (IIFL), is going to raise Rs 750 crore through an issuance of non-convertible debentures.
In a bid to expand its loan book, India Infoline Investment Services, an NBFC subsidiary of India Infoline (IIFL), is going to raise Rs 750 crore through an issuance of non-convertible debentures (NCD), including an oversubscription option of Rs 375 crore.
An NCD is a type of loan issued by a company that cannot be converted into stock and usually carries a higher interest rate than a convertible debenture.
Meanwhile, the issue offers a coupon rate in the range of 11.70% -11.90% with three tenures--- ranging from three years, forty months and five years as redemption date.
“We want to explore multiple sources of fund raising apart from bank loans. Hence, we need to tap NCD route as well. Moreover, it makes sense for us to go for retail issue especially when we have a significant retail presence in India,” Nirmal Jain, chairman IIFL told moneycontrol.com,
He further said no one can predict when interest rates will peak. IIFL has currently more then 3000 business units in over 500 cities pan India. It currently lends money under different segments like loan against gold, loans against shares, home loans, healthcare finance and promoters funding.
Its total loan books stands at Rs 3,290 crore. Net performing assets stood at Rs 0.36% in FY11 as against 0.46% in FY10 While gross non-performing assets stood at 0.44% in FY11 compared with 0.60% in FY10. Almost the entire loan book is co-lateralised. Loan to value ratio (LTV) is on an average around 50%
This means for a property of Rs 100 one can avail a loan of Rs 50. All NCDs will be listed on both NSE and BSE. The issue opens on August 4 and closes on August 12.
Meanwhile, in the past few weeks Muthoot Finance , Shriram Transport and Manappuram General Finance have all rushed to raise funds via NCD issues to cash in on the strong investor appetite for high-yielding debt instruments.
According to the industry buzz, all NBFCs are facing problems in raising funds through banks on concerns of priority sector status being removed by the Reserve Bank of India on NBFC loans other than securitised ones. Read This: NBFC stocks on a roll: Will the party last long?
IIFL Holdings stock price
On September 19, 2014, IIFL Holdings closed at Rs 155.55, down Rs 1.35, or 0.86 percent. The 52-week high of the share was Rs 160.30 and the 52-week low was Rs 46.50.
The company's trailing 12-month (TTM) EPS was at Rs 3.03 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 51.34. The latest book value of the company is Rs 43.82 per share. At current value, the price-to-book value of the company is 3.55.
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