India Infoline Investment Services Ltd (IIISL) has announced a coupon rate of 11.7 or 11.9 per cent (depending on the tenor opted for by investors) for its Rs 375 crore non-convertible debenture issue.

IIISL is India Infoline's NBFC subsidiary.

The company has the option to retain oversubscription of an additional Rs 375 crore. The issue opens on August 4 and closes on August 9.

The NCDs have a face value of Rs 1,000 each and are secured and redeemable. They have been given a stable rating of AA- by ICRA and CARE. The minimum investment in the issue is Rs 5,000 or five NCDs for an application.

The NCDs will be listed on the NSE and BSE and will have a tradable lot size of 1 NCD.

“Investors will typically turn to fixed income instruments like NCD's as interest rates have peaked and have attractive yields.” said Mr Nirmal Jain, Chairman of IIFL.

Utilisation of funds

The company plans to utilise the funds for various financing activities including lending, providing loans against securities and investments, to repay its existing loans and for its business expenditure.

The cost of funds for the company is in the range of 11 to 12 per cent and the yield on funds is 16 to 17 per cent, said Mr Jain to Business Line last week. The company requires funds amounting to Rs 3,000 crore over the next 12 to 18 months, he said.

Axis Bank Ltd, JM Financial Consultants Private Ltd and A.K. Capital Services Ltd are the lead managers to the issue. Link Intime India Private Ltd is the registrar to the issue.

In queue

In June, Shriram Transport Finance raised Rs 1,000 crore through its NCD issue by offering a maximum interest rate of 11.6 per cent. Muthoot Finance, Shriram City Union Finance and Manappuram General Finance are preparing to issue NCDs over the next few weeks.

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