· Plans Rs 500 cr issue with option to retain over-subscription of up to Rs 500 cr
· Yield on Redemption up to 11.50%
· Credit Rating of CARE AA+ by CARE and AA (
MUMBAI: Shriram Transport Finance Company Limited (STFC), one of the largest asset financing NBFCs in India, plans to enter the debt capital market on 27 July, 2009 with a public issue of Non Convertible Debentures (NCDs) aggregating up to Rs 500 crores with an option to retain over-subscription of upto Rs. 500 crores for issuance of additional NCDs. The company has filed a prospectus with the Registrar of Companies to this effect.
The NCD issue, with yield on Redemption of upto 11.50% (per annum), closes on August 14, 2009 with an option to close earlier or on such dates as may be decided, by the board of directors of the Company, subject to necessary approvals.
This Issue has been rated ‘CARE AA+’ by CARE and ‘AA (
Key Highlights of the Instrument:
· The face value of Rs. 1,000 per NCD and tradable lot size of 1 NCD is expected to enhance liquidity and trading in the secondary market.
· Five different investment options.
- Yield on redemption of NCDs upto 11.50% per annum.
- Additional interest of 0.25% per annum for Senior Citizens in relation to options I and II NCDs.
- The minimum application size is Rs 10,000 and in multiples of Rs 1,000 thereafter.
- Interest on application money at the rate of 8% p.a. to be paid from the date of realization of the cheque or 3 days from the date of receipt of the application, whichever is later, upto one day prior to the deemed date of allotment.
- Interest on refund at 2.50% per annum on valid applications.
- Issuance of NCDs to Non-Resident Indians (NRIs) not to exceed an aggregate of Rs 10,000 lakhs and only on a non-repatriable basis.
- No TDS deductable.
- Allotment on a First come First serve basis, in the first instance, with respect to each category of investors.
Speaking on the occasion, Mr R Sridhar, Managing Director of STFC, said: “Over the decades, STFC has achieved success in reaching its objective of offering the common man with a host of products and services that would be helpful to him on his path to prosperity. The current NCD issue will help us enhance our lending capacity and further our objective”.
STFC intends to use the funds raised through the issuance of NCDs for various financing activities including lending and investments, subject to the restrictions contained in the Foreign Exchange Management (Borrowing and Lending in Rupee) Regulations, 2000, and other applicable statutory and/or regulatory requirements, to repay its existing loans and its business operations including for its capital expenditure and working capital requirements.
ENAM Securities Private Limited, A K Capital Services Limited, ICICI Securities Limited and Kotak Mahindra Capital Company Limited have been appointed as the Lead Managers to the Issue, while Integrated Enterprises (India) Limited will be acting as the Registrar to the Issue.
STFC is a part of the Shriram conglomerate which has significant presence in financial services viz., commercial vehicle financing business, consumer finance, life and general insurance, stock broking, chit funds and distribution of financial products such as life and general insurance products and units of mutual funds. Apart from these financial services, the group is also present in non-financial services business such as property development, engineering projects and information technology.
STFC is one of the largest asset financing NBFCs in India with a niche presence in financing Small Truck Owners (STOs) and pre-owned trucks. The Company was incorporated in the year 1979 and is registered as a Deposit taking NBFC with Reserve Bank of
With a track record of about 30 years, STFC is among the leading organized finance provider for the commercial vehicle industry with a focus to provide various credit facilities to STOs. The Company has also added passenger commercial vehicles, multi-utility vehicles, three wheelers, tractors and construction equipment to its portfolio, making it a diversified, end to end provider of finance solutions to the domestic road logistics industry.
As on 31st March 2009 STFC’s pan-India presence included 479 branches and Partnerships with over 500 private financiers and a customer base of over 600,000 which have contributed to its overall growth over the years. The company has a team of around 12,196 employees.
STFC has demonstrated consistent growth in its business and profitability with its total income and profit after tax growing from Rs. 34,568.84 lakhs and Rs. 4,932.38 lakhs in Financial Year 2004-05 to Rs. 3,73,112.97 lakhs and Rs. 61,240.21 lakhs in Financial Year 2008-09 at a CAGR of 81.25% and 87.71%, respectively. AUM have grown by a compounded annual growth rate (CAGR) of 68.01% from Rs. 2,92,159.35 lakhs (which comprise of AUM in the books of Company of Rs. 1,58,700.28 lakhs, assets securitised / assigned of Rs. 28,368.43 lakhs and portfolio managed by the Company of Rs. 1,05,090.64 lakhs) in FY 2005 to Rs. 23,28,110.65 lakhs (which comprise of AUM in the books of Company of Rs. 17,92,397.14 lakhs, assets securitised / assigned of Rs. 5,31,092.91 lakhs and portfolio managed by the Company of Rs. 4,620.60 lakhs) in FY 2009.
