Edelweiss Broking offers over 10% interest on its bonds

Edelweiss Broking on July 7 said it will raise up to Rs 300 crore via a public issue of secured redeemable Non-Convertible Debentures (NCDs) of the face value of Rs 1,000 each. This will include a base issue of Rs 150 crore and another Rs 150 crore of the green-shoe option.

The company is offering fixed coupon ranging from 8.75-9.95 percent per annum. The tenor of the papers will be in the range of 24-120 months and the coupon payment will vary accordingly.

The high rate of interest offered—double that of SBI FD interest rate on 1- year deposits—shows the pressure on relatively riskier debt papers to offer more as bond yields spike.

The company is also offering an additional 0.20 percent to earlier NCD subscribers or shareholders of many companies of Edelweiss Group. This will take the maximum coupon rate to 10.15 percent.

Edelweiss Broking plans to use at least 90 percent of the net proceeds for working capital purposes and the balance will be utilised for general corporate purposes.

The NCDs have been rated CRISIL AA- with a negative outlook and Acuite AA with a negative outlook.

The issue, which opened for subscription on July 5, will close on July 26, with an option of early closure. The NCDs are proposed to be listed on BSE to provide liquidity to the investors.

Equirus Capital Private Limited and Edelweiss Financial Services Limited are the lead managers to this Issue.