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Shriram Transport Finance plans to raise Rs 500 crore worth non-convertible debentures with the option of retaining additional Rs 500 crore (green-shoe option).
According to sources familiar with the development, the coupon rate is expected to be at about 11-11.5 per cent. Shriram Transport Finance is the largest non-banking finance company providing loans against used commercial vehicles.
The company expects to use the funds raised for truck financing. Currently the NBFC portfolio is estimated at Rs 36,000 crore.
Shriram Transport Finance has filed draft offer with SEBI and is awaiting clearance. Of 80 per cent available for retail subscribers, half of it is available for small retail investors — (less than Rs 5 lakh to invest) can subscribe to the issue. This is the third non-convertible debentures issue from the company, the first issue was in August 2009 and the second was in May 2010.
NCDs are debt instruments with a fixed tenure issued by companies to raise money for business purposes. Unlike convertible debentures, NCDs can't be converted into equity shares of the issuing company at a future date.
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