Cholamandalam Investment and Finance Company Limited (CIFCL) plans to raise up to ₹1,000 crore via its maiden public issue of secured, rated, listed redeemable non-convertible debentures (NCDs).

Arulselvan D, President & CFO, said with the assets under management crossing the ₹1 lakh crore mark in December 2022, the company decided to diversify its borrowing avenues by tapping retail investors.

Currently, bank term loans account for 57 per cent of the NBFCs total borrowings, followed by debentures (16 per cent), securitisation (10 per cent), among others.

Arulselvan expects borrowings via issuance of debentures to retail investors to increase to 10 per cent down the line.

Tenor options

The NCDs, which carry a face value of ₹1,000 each, are being offered with tenor options of 22 months, 37 months and 60 months with annual and cumulative payments options across six series. The minimum application size is ₹10,000 (i.e., 10 NCDs) and thereafter in multiples of ₹1,000 (i.e. 1 NCD) thereof.

Effective yield (per annum) for the NCD holders in all categories of investors ranges from 8.25 per cent to 8.40 per cent per annum, according to the Chennai-headquartered non-banking finance company’s statement.

The base issue size is ₹500 crore with an option to retain any oversubscription up to ₹500 crore. The NCD issue opens on April 25, 2023 and closes on May 9, 2023 with an option of early closure.