Aditya Birla Finance's First Public Issue Of NCDs Worth Rs 2,000 Crore To Open On September 27

Leading NBFC, Aditya Birla Finance share price recorded a see-saw-like performance on Tuesday after the company announced its plan to raise Rs 2,000 crore through maiden public issuance of non-convertible debentures (NCDs). The public issue will open on September 27 and will close on October 12, 2023.

As per the regulatory filing, Aditya Birla Finance will issue its first public NCDs worth Rs 1,000 crore with an option to retain oversubscription up to Rs 1,000 crore -- taking the total to 2,00,00,000 NCDs for an aggregate amount of up to Rs 2,000 crore.

These NCDs have coupon rates in the range of 8.00% p.a. to 8.10% p.a. for annual options with effective yields ranging
from 7.99% p.a. to 8.09% p.a. across various series. It will be first-come-first-serve basis. Meanwhile, the minimum application size of Rs 10,000 (10 NCDs) across all series collectively and in multiples of Rs 1,000 thereafter.

The Issue will open on Wednesday, September 27, 2023, and close on Thursday, October 12, 2023, with an option of early closure of the Issue on such date, as may be decided by the Board of Directors of the company or a duly authorized committee thereof, subject to compliance with applicable laws.

Aditya Birla Finance plans to utilise at least 75% of the net proceeds of the Issue towards onward lending, financing and repayment of interest and principal of existing borrowings of the Company and a maximum of up to 25% of the net proceeds towards general corporate purposes.

For the public issue, Trust Investment Advisors Private Limited, A.K. Capital Services Limited, JM Financial Limited, and Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited) are the lead managers.

Rating agencies like India Ratings and ICRA have assigned 'IND AAA Outlook Stable' and '[ICRA] AAA (Stable)' ratings on these NCDs. In its filing, Aditya Birla said that the ratings are valid and will continue to be valid for the life of the instrument unless withdrawn or reviewed. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations and carry the lowest credit risk.

ABFL is registered with the RBI as a non-deposit-taking systemically important non-banking financial company. ABFL have been categorized as an 'Upper Layer' NBFC under the scale-based regulatory framework for NBFCs introduced
by the RBI, with effect from September 30, 2022.

As of June 30, 2023, the company had total loans outstanding of Rs 85,778.5 crore and a total asset under management of Rs 85,891.2 crore. It provides end-to-end lending, financing and wealth services to retail, HNI, ultra HNI, micro, small and medium enterprises, small and medium enterprises and corporate customers and offers customized solutions in areas of personal and business loans, corporate finance, mortgages, personal loans, business loans, check-out financing, loan against property, term loans, working capital loans, loans against securities, project loans and wealth services.

Following the development, Aditya Birla Capital shares traded volatile and in the range of Rs 178.35 apiece to Rs 175.05 apiece respectively on BSE. At the time of writing, the stock traded at Rs 175.80 apiece, down by 0.42% on BSE. Its market cap is over Rs 45,684 crore.