Edelweiss to open public issue of NCDs on January 16

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Edelweiss to open public issue of NCDs on January 16
The non-banking finance entity of Edelweiss Financial Services, ECL Finance, is set to open its first public issue of non-convertible debentures (NCDs) on January 16. The company providing finance facility lends nearly 48% of its total loans for a short term in the range of 18-24 months. To know about NCDs click here.

The NCD issue that plans to mobilize a capital of Rs. 250 crore with an option to retain over-subscription of upto Rs. 250 crore aggregating to a maximum of Rs. 250 crore will remain open until January 27, 2014 with an option of early close.

The proposed issue of secured redeemable NCDs with a face value of Rs. 1000 for each of the bond will be available for different maturity terms from 3-5 years. The major portion of the issue i.e. 60% is earmarked for subscription by retail investors including high-net worth individuals (HNIs) and the remaining can be subscribed by qualified institutional buyers (QIBs) and corporates with an investment of 20% each.

Lead managers of the NCD issue are Axis Capital Limited, ICICI Securities Limited and Edelweiss Financial Services Limited. The NCDs will be listed on BSE.

Pre-tax coupon rate:

The secured NCDs will fetch a pre-tax coupon rate of 11.60%-11.85% to all investor categories. Indian employees of the company together with resident shareholders of Edelweiss shall be entitled to an additional coupon rate of 0.25%.

With a high pre-tax return, investors can bet on the NCD issue and diversify their investment portfolio.

Commenting on the high returns from the investment option, Rashesh Shah-Chairman and CEO of Edelweiss Financial Services Ltd. is quoted in one of the media reports saying " A large chunk of savings are either being held in low-yielding bank deposits or being channelized into non-financial assets like real estate and gold. Our latest NCD, with its attractive returns offers an opportunity for retail investors to make better investments".

Rating:

Credit Analysis & Research Limited (CARE), the rating agency has accorded a 'CARE AA' (Double A) rating to the Edelweiss NCD issue.

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Story first published: Monday, January 13, 2014, 14:59 [IST]
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