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JM Financial Products, the NBFC arm of JM Financial Services Group, intends to raise ₹500 crore through the second tranche of Non-Convertible Debenture (NCD) issue which opens on Tuesday.
The NCDs, with a face value of ₹1,000 each, comes with a base issue size of ₹100 crore and an option to retain oversubscription up to ₹400 crore. The issue has a shelf limit of ₹2,000 crore for a year (till April 2020).
“We are coming up with one tranche now, while we will do one more sometime closer to Diwali. We are hopeful that we will easily cover the base size and do a lot better,” JM Financial Managing Director Vishal Kampani told BusinessLine .
“There is a bit of negative sentiment in the economy and there is a bit of worry, which is a challenge all of us are facing now. But we have certain clear advantages such as a low debt-to-equity ratio compared with most NBFCs in the country,” he said.
The issue will close on September 4 (with an option of early closure or extension).
The NBFC has a debt-to-equity ratio of 1.69 on a consolidated basis. Its loan book stood at ₹5,503.4 crore as of June 30, . Its gross NPA was at 0.1 per cent of the loan book during the first quarter of FY20.
AK Capital Services, JM Financial and Trust Investment Advisors are the lead managers to the issue, which is proposed to be listed on the BSE.
“Our public issue of NCDs will further diversify our borrowing and investor mix,” Kampani said.
Home loans, capital markets loans and corporate lending will be the focus for the NBFC, which intends to go slow on real estate developer loans.
The company’s average lending ticket size for construction finance is at ₹60-100 crore, corporate loans at ₹60-80 crore, SME finance at ₹3-15 crore, home loans at ₹10-20 lakh and capital market loans at ₹1-5 crore.
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