Shriram Transport to raise upto Rs. 1000 crore through public issue of NCDs

Shriram Transport Finance Company Limited, one of the largest asset financing NBFCs in the organised sector in the country that cater to first time buyers (FTB) and small road transport operators (SRTOs), with a primary focus on financing pre-owned commercial vehicles is, subject to market conditions and other considerations, proposing a public issue of upto Rs. 1,000 crore by issuing Secured Redeemable Non-Convertible Debentures (NCDs) of the face value of Rs. 1,000 each.

The company is coming out with its Tranche 2 Issue of NCDs having a base size of Rs. 200 crore with an option to retain oversubscription aggregating up to Rs. 1,000 crore which is within the Shelf Limit.

The Tranche 2 Issue will open for subscription on Monday, January 06, 2020 and is scheduled to close on Wednesday, January 22, 2020, with an option of early closure or extension, as may be decided by the Board of Directors of the Company or the duly constituted committee thereof, being the Debt Issuance Committee- Public NCDs as mentioned in the Tranche 2 Prospectus.

The proposed NCDs under the Tranche 2 Issue have been rated ‘CARE AA+; Stable’ by CARE Ratings Limited, ‘CRISIL AA+/Stable’ by CRISIL Limited and ‘IND AA+: Outlook Stable’ by India Ratings and Research Private Limited. These ratings are considered to have high degree of safety regarding timely servicing of financial obligations and carry very low credit risk.

The funds raised through the Tranche 2 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 and 5 years with monthly, annual and cumulative interest payment option and 7years, with monthly & annual interest payment options.

These NCDs, bearing a fixed rate of interest, are being offered under 8 (eight) different series:

Series I, II and III are monthly interest payment options, having tenor of 3, 5 and 7 years respectively, and the monthly Coupon shall be 8.52% p.a., 8.66% p.a. and 8.75% p.a. respectively. For Series IV, V and VI interest is payable annually, having tenor of 3, 5 , 7 years respectively, and the coupon shall be 8.85% p.a., 9.00% p.a., 9.10% p.a. respectively. Series VII and VIII are cumulative options, having tenor of 3 and 5 years respectively, where face value and interest accrued are paid at the end of the tenor and will be redeemed at Rs. 1289.99, and Rs. 1539.35 per NCD respectively. Effective yield for Series VII and  VIII shall be 8.85% p.a. and 9.00% p.a respectively.

Additionally, Senior Citizens (initial allottees) under Category III and Category IV are entitled to additional incentive of 0.25% p.a across all series provided the NCDs are continued to be held by such investors on the relevant record date for the relevant interest payment date for such series. Accordingly, the amount payable on redemption to such Senior Citizens for NCDs under Series VII and Series VIII is Rs. 1298.91 and  Rs. 1557.11 per NCD respectively provided the NCDs are continued to be held by such investors on the relevant record date for the relevant redemption date for such series.

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

JM Financial Limited, A. K. Capital Services Limited and SMC Capitals Limited 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.

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