HYDERABAD: Shriram Transport Finance Company on Monday said it was considering raising up to Rs 10,000 crore through a public issue of secured redeemable Non-Convertible Debentures (NCDs) of the face value of Rs 1000 each.
The funds, when raised, will be used for lending, financing and repayment or prepayment of existing loans, according to the company. Shriram Transport caters to first-time buyers and small road transport operators with a primary focus on financing pre-owned commercial vehicles.
“The company is coming out with its tranche 1 issue of NCDs having a base size of Rs 300 crore with an option to retain over-subscription aggregating up to Rs 10,000 crore, which is the shelf limit,” the company said in a statement. According to the NBFC, tranche 1 will open for subscription on July 17 and will close on August 16 with an option of early closure or extension as may be decided by the board of directors.
The proposed NCDs, bearing a fixed rate of interest between 9.12 and 9.70 per cent per annum, are being offered under ten different series. Broadly, the option of investment tenors includes 30 months with annual interest payment option, and 42, 60 and 84 months with monthly, annual and cumulative interest payment options. Senior citizens under a certain category of investment will be entitled to an additional incentive of 0.25 per cent per annum across all series, the company said.
The proposed NCDs are rated AA+ stable by Care Ratings, AA+/stable by Crisil Ltd, and AA+ outlook stable by India Ratings. “The funds raised through the tranche 1 will be used for onward lending, financing and for repayment or prepayment of interest and principal of existing borrowings of the company and for general corporate purposes,” the company said. The NCDs are proposed to be listed on both NSE and BSE, while the former shall be the designated stock exchange.