Srei Equipment Finance today proposed to raise up to Rs 250 crore through a public issue of redeemable non-convertible debentures (NCDs) with an option to retain oversubscription of additional amount up to Rs 500 crore.

The face value of the proposed NCDs is Rs 1,000 each amounting to a base issue size of Rs 250 crore. “The interest rate we are looking at is in the range of 9.75 per cent to 10.25 per cent with tenures of 3 to 7 years of different categories,” said Suni Kanoria, Joint Managing Director Srei Equipment Finance and Vice Chairman, Srei Infrastructure Finance.

Srei Capital Markets and Edelweiss Financial Services are the lead managers to the issue.

The issue is going to open for subscription on April 9, which has scheduled to close on April 30, 2015. The NCDs offered through the draft prospectus are proposed to be listed on BSE and NSE.

Kanoria added that the funds raised will be used for its on-lending and finance business including other corporate business. Total assets under management or the loan business of the company stand at about Rs 18,514 crore for FY15.

“We aim to grow about 5-10 per cent of the overall liabilities in the first year of raising funds through this NCD issue,” he added.

Srei Equipment Finance, a 50:50 joint venture NBFC (non-banking financial company) between Srei Infratructure Finance and BNP Paribas Lease Group, is largely into financing of construction and mining equipment (91 per cent lending) and financing of material handling equipments, pre-owned equipments, healthcare, IT and rural infrastructure. The company wants to change the skewed ratio from 91:9 to 70:30 in the “longer term”.

Moses Harding, Group CEO and Chief Economist – Liability and Treasury Management, Srei Infrastructure Finance, said, “The investor appetite is shifting from equities to debt with interest rates heading downwards seeing some consolidation into the banking sector.”

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