To attract retail investors and diversify its liabilities, Religare Finvest is planning to launch a secured non convertible debenture (NCD) issue of Rs 400 crore for a 3 and 5 year period, in the second week of September this year. The company has a green shoe option to raise another Rs 400 crore.

Religare Finvest, a non banking financing company is a wholly owned subsidiary of the listed Religare Enterprises. The company focuses on lending to small and medium enterprises (SME’s) and capital market financing.

On raising long term debt

“We are focused on providing loans to SME’s backed by a collateral or unsecured working capital loans. Our typical loans range from a 2 to 5 year period. To match this with our liability side of the book, we are raising debt for a 3 and 5 year period,” said Kavi Arora, CEO, Religare Finvest to Business Line.

The funds will be utilised for funding its existing growth. Religare Finvest currently has 39 branches spread over 15 states.

The current cost of funding for the company is 10 per cent and the yield on funds is 14 per cent.

SME financing comprises 69 per cent of Religare Finvest’s loan book. Mr. Subir Gokarn, RBI’s Deputy Governor, recently said at an SME summit that the financial assistance provided to the SME’s needs to be balanced with risks. “SME sector has shown resilience and we have not seen a deterioration of credit from the SME sector,” said Mr. Arora.

Religare Finvest plans to increase its loan portfolio to Rs 14,000 crore by the end of the current fiscal. “We plan to increase our loan book by 35 to 40% by the end of this fiscal. At the end of the June quarter, our loan portfolio stood at Rs 9,900 crore,” added Mr. Arora.

>deepa.n@thehindu.co.in

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