Home BusinessFinancial Aditya Birla Finance to raise up to Rs 2K cr through maiden issue of NCDs

Aditya Birla Finance to raise up to Rs 2K cr through maiden issue of NCDs

by Paul Morgan

Aditya Birla Finance Limited (ABFL) has announced plans to raise up to Rs 2,000 crore through its maiden public issue of non-convertible debentures (NCDs). The company, a subsidiary of Aditya Birla Capital Limited, aims to issue NCDs for Rs 1,000 crore, with an option to retain oversubscription up to Rs 1,000 crore, resulting in an aggregate amount of up to Rs 2,000 crore.

According to a filing by ABFL, the net proceeds of the issue will be used primarily for onward lending, financing, and repayment of the company’s existing borrowings. Up to 25% of the net proceeds will be allocated for general corporate purposes.

Investors will have the opportunity to subscribe to the NCDs on a first-come, first-serve basis. The debentures will be available in various tenor options of three, five, or ten years, with interest payment frequency options of ‘monthly’, ‘annual’, or ‘cumulative’. The coupon rates for the annual options will range from 8% per annum to 8.10% per annum, with effective yields ranging from 7.99% per annum to 8.09% per annum across different series.

Leading financial institutions, namely Trust Investment Advisors Private Limited, AK Capital Services Limited, JM Financial Limited, and Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited), have been appointed as the lead managers of the issue. The public issue will commence on September 27 and close on October 12, with an option for early closure.

ABFL highlighted in a release that the NCDs have been rated IND AAA Outlook Stable by India Ratings & Research Private Limited and ICRA AAA (Stable) by ICRA Limited. This rating indicates the highest level of creditworthiness and stability of the debentures.

This move by ABFL to raise funds through NCDs reflects the company’s intention to expand its lending activities and strengthen its financial position. By attracting capital from investors, ABFL aims to support its ongoing operations and fulfill its commitments towards existing borrowers. The diversified tenor and interest payment options are designed to cater to the preferences of a wide range of investors.

Investors who are interested in participating in the public issue of ABFL’s NCDs should carefully evaluate the terms and conditions stated in the offer document. The strong credit ratings assigned to the debentures by reputable credit rating agencies enhance the attractiveness of this investment opportunity.

Overall, the upcoming public issue of ABFL’s NCDs presents potential investors with a chance to contribute to the growth of a leading financial institution in India while earning attractive returns on their investment.

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