Kirloskar Group-Backed NBFC To Offer NCDs Worth Rs 300 Crore With 9-10% Rates

NBFC-ML, part of Kirloskar Group, Arka Fincap has announced a public issue of secured, rated, listed, redeemable non-convertible debentures up to Rs 300 crore having a face value of Rs 1,000 each. JM Financial and Nuvama Wealth Management are the lead managers for the offer.

Of the total, the NCDs base issue size is up to Rs 150 crore and has a green shoe option of retaining oversubscription of about similar Rs 150 crore. Together, the total fundraising will be Rs 300 crore.

Vimal Bhandari, Executive Vice Chairman & CEO, of Arka Fincap Limited said, "We are delighted to launch the Tranche I Issue of the NCDs. We are a professionally managed organization part of the Kirloskar Group, primarily engaged in providing structured secured term financing solutions to corporates, real estate and urban infra financing, loans to SMEs & MSMEs and personal finance loans to borrowers in India."

Bhandari said, "With our focus on our customers, experienced management team and vigilant monitoring of our assets, our business has experienced growth since the commencement of our operations in Fiscal 2019."

He added, "We believe that we have a well-diversified funding profile that underpins our strong liquidity management system, our strong credit rating and brand equity. The public issue of NCDs is in line with our strategy of liability diversification."

As per the statement, the NCDs offer Coupon Rates ranging from 9.00% to 10.00% per annum with quarterly and annual interest options. The NCDs have three tenors of 24 months, 36 months and 60 months.

At least 75% of the funds raised through this Tranche I Issue will be used for the purpose of onward lending, financing, and for repayment of interest and principal of existing borrowings of the Company and the balance is proposed to be utilized for general corporate purposes, subject to such utilization not exceeding 25% of the amount raised in the Tranche I Issue, it said.

The NCDs are proposed to be listed on BSE Limited.

Arka Fincap is primarily engaged in providing structured term financing solutions to corporates, real estate and urban infra financing, loans to micro, small and medium enterprise ("MSME") and personal finance loans to borrowers in India.

The company operates four principal lines of business, namely corporate lending, real estate and urban infra financing, MSME lending and personal lending.

As of September 30, 2023, the company's total Loan Book stood at Rs 4,033.19 crore.