Shriram Transport to raise INR 700 crore

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Shriram Transport Finance is proposing a public issue of upto INR 700 crore by issuing Secured Redeemable Non-Convertible Debentures (NCDs) of the face value of INR 1,000 each.

The company, one of the largest asset financing NBFC in the country with a primary focus on financing pre-owned commercial vehicles, is coming out with its Tranche 3 Issue of NCDs having a base size of INR 200 crore with an option to retain additional amount up to INR 500 crore from oversubscription, if any, aggregating to a Tranche 3 Issue Size of upto INR 700 crore.

The Issue will open for subscription on January 07, 2019 and is scheduled to close on January 31, 2019, with an option of early closure, and/or extension, as may be decided by the Board of Directors of our Company or duly constituted committee Debt Issuance Committee- Public NCDs as mentioned in the Tranche 3 Prospectus.

The proposed NCDs under this Issue have been rated ‘CRISIL AA+/Stable’ by CRISIL and ‘IND AA+: Outlook Stable’ by India Ratings and Research. These ratings indicate high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk.

The funds raised through this Issue will be used for onward lending, financing, and for repayment/ prepayment of interest and principal of existing borrowings of the Company and for general corporate purposes.

Options of investment tenors are 3, 5 and 10 years, with monthly, annual & cumulative payment options.

These NCDs, bearing a fixed rate of interest, are being offered under seven different series:

Series I and II are monthly interest payment options, having tenure of 5 years and 10 years respectively, and the monthly Coupon shall be 9.12% p.a. and 9.30% p.a. respectively i.e an annualized yield of 9.50% p.a. and 9.70% p.a. respectively.

Series III, Series IV and Series V, interest payable annually, having tenure of 3 years, 5 years and 10 years, respectively, and the coupon shall be 9.40% p.a., 9.50% p.a. and 9.70% p.a. respectively.

Series VI and VII are cumulative options, having tenure of 3 years and 5 years respectively, where face value and interest accrued are paid at the end of the tenure and will be redeemed at INR 1309.66 and INR 1574.63 per NCD respectively. Effective yield shall be 9.40% p.a. and 9.50% p.a. respectively.

Additionally, Senior Citizens (initial allottees) under Category III and Category IV are entitled to additional incentive of 0.25% per annum across all series. Accordingly, the amount payable on redemption to such Senior Citizens for NCDs under Series VI and Series VII is INR 1,318.67 and INR 1,592.70 per NCD respectively.

The NCDs are proposed to be listed on BSE Limited and National Stock Exchange of India Limited and BSE shall be Designated Stock Exchange.

Axis Bank Ltd, A. K. Capital Services Ltd, Edelweiss Financial Services Ltd, JM Financial Limited, and Trust Investment Advisors Pvt Ltd are the Lead Managers to the Issue. Catalyst Trusteeship Limited is the Debenture Trustee to the Issue, while Integrated Registry Management Services Private Limited is the Registrar to the Issue.

Shriram Transport Finance Company Limited (STFC) is the flagship company of Shriram group. STFC is the one of the largest asset financing non-banking finance companies in the organised sector in India that cater to first time buyers (FTB) and small road transport operators (SRTOs) for financing preowned commercial vehicles. It has a pan-India presence with a network of 1,213 branches and employs 23,819 employees as of March 31, 2018. STFC provides financing for passenger commercial vehicles, multi-utility vehicles, three wheelers and tractors as well as ancillary equipment and vehicle parts finance, such as loans for tyres and engine replacements, and provide working capital facility for FTBs and SRTOs.