Cholamandalam Investment and Finance Company Limited (CIFCL), a financial services provider, has opened its maiden public issue of secured, rated, listed redeemable non‐ convertible debentures of the face value of Rs 1,000 each (NCDs) with a base issue size of Rs 500 crore. It also has an option to retain any oversubscription up to Rs 500 crore, aggregating up to Rs 1,000 crore, which is within the shelf limit of Rs 5,000 crore.
The Tranche I Issue opened on April 25, 2023 and closes on May 9, 2023 with an option of early closure. The NCDs are proposed to be listed on BSE and NSE. The NCDs have been rated “IND AA+/Stable” by India Ratings & Research and “AA+ (Stable)” by ICRA.
(Non-convertible debentures (NCDs) are debt instruments with a fixed tenure issued by companies to raise money for business purposes. Unlike convertible debentures, NCDs can’t be converted into equity shares of the issuing company at a future date.)
The issue offers various series of NCDs for subscription with coupon rates ranging from 8.25 percent per annum to 8.40 percent per annum. The minimum application size would be Rs 10,000 (i.e., 10 NCDs) and thereafter in multiples of Rs 1,000 (i.e. 1 NCD) thereof.
The NCDs under the Tranche I Issue are being offered with maturity/ tenor options of 22 months, 37 months and 60 months with annual and cumulative payments options across series I, II, III, IV, V and VI.
Effective yield (per annum) for the NCD holders in all categories of investors ranges from 8.25 percent per annum to 8.40 percent per annum. Amount on Redemption per debenture on maturity for the NCD holders in all categories of investors under the cumulative coupon payment option ranges from Rs 1,156.64 to Rs 1,497.40 per NCD across various tenures.
As of December 31,2022, the company had 22.70 lakh active customers across India being served by 1,166 branches across 29 states and union territories. Total AUM as on Dec 31, 2022 stood at Rs 95,467 crore.
Out of the net proceeds of the Tranche I Issue, after meeting the expenditures related to the Tranche I Issue, at least 75 percent shall be utilised for the purpose of onward lending, financing, and for repayment of interest and principal of existing borrowings of the Company and up to 25 percent for general corporate purposes.
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