Bengaluru-headquartered CreditAccess Grameen Ltd (CAGL) will tap the capital markets before August-end 2021 to comply with the minimum public shareholding (MPS) norm of 25 per cent for listed companies.
As per the company’s latest shareholding pattern, the promoter’s (CreditAccess Asia NV) shareholding as at June-end 2020 was at 79.91 per cent, against 80.14 per cent as at June-end 2019. The balance shareholding is with public shareholders.
CAGL is registered with the Reserve Bank of India as a non-banking finance company — microfinance institution (NBFC-MFI).
Udaya Kumar Hebbar, Managing Director & CEO, emphasised that CAGL has close to 24 per cent capital adequacy ratio against the regulatory requirement of 15 per cent, and this is sufficient to manage growth in FY21.
“However, we need to go to the capital market to reduce our promoter’s shareholding by August 2021. Their shareholding is currently at around 79 per cent.
“So, obviously, we will tap the market in the next one year so that the promoter shareholding can come down below 75 per cent. Otherwise, the capital that we have is sufficient for one year,” he said.
In August 2018, CAGL had completed its Initial Public Offer (IPO) comprising a fresh issue of equity shares with a face value of ₹10 each at an offer price of ₹422 each, aggregating ₹630 crores and an offer for sale of equity shares by the promoters, CreditAccess Asia N.V, aggregating ₹501.18 crore.
‘Will raise money required for 2-3 years’
As per SEBI regulations, a company has to increase its public shareholding to at least 25 per cent within a period of three years from the date of listing of the securities.
“We will raise what is required for the company for the next two-three years. So, naturally the (promoter) shareholding will come down,” Hebbar said.
In its last Covid-19 status update in April, CAGL said it had sufficient cash balance of ₹530 crore as on March 31, 2020, to sustain business operations over a reasonable period of time.
As per the update, the company was planning to draw new borrowings in the first and second quarter based on future repayment schedule and business growth plans.
Emphasising that the rural economy, where CAGL’s business is concentrated, has been more resilient to the impact of the pandemic vis-a-vis the urban economy, Hebbar assessed that by the end of the six month loan moratorium period (March 1 to August 31), not more than 20-30 per cent of his company’s customers would have opted for either partial or full moratorium, with the remaining 70-80 per cent in a position to pay back loans.