HYDERABAD : Manappuram Finance Ltd on Thursday said it plans to raise up to Rs 350 crore through issuance of non-convertible debentures (NCDs) on private placement basis. The company said its financial resources and management committee of the board of directors has approved the issuance of rated, secured, redeemable NCDs having face value of Rs 10 lakh each for the amount of Rs 350 crore.
In a regulatory filing, it added that another meeting will be held on December 31, to consider the proposed allotment for the said issue. It may be noted that the non-bank finance company focuses on lending against gold across India and has a loan portfolio that’s tilted towards loans against gold jewellery and ornaments comprising about 67 per cent of its loan book.
This is supplemented by microfinance at 20 per cent and another lending. About 40 per cent of the company’s lending against gold is conducted online. It may be noted that companies dealing with gold financing are subjected to stringent regulations including loan-to-value restrictions and higher capital for lending against gold.
Last month, international credit rating agency S&P had assigned an issuer rating of BB minus long-term and B short-term with a stable outlook to the company’s proposed issue of debt instruments in the form of US dollar-denominated senior notes bonds by the establishment of a euro medium-term note programme.
Meanwhile, non-banking financial companies (NBFCs) are facing higher operating risks than banks due to lack of access to central bank funding and have less onerous regulations — notwithstanding some regulations on capital adequacy, asset quality and asset-liability management. Like several other finance players, Manappuram intends to capitalise on the growth opportunities beyond its core competency and some of the areas include insurance broking and microfinance as well as auto, affordable housing, and small and mid-size enterprise loans.
NBFCs face high operating risks