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JM Financial Products, the NBFC arm of JM Financial Services Group, plans to raise ₹1,000 crore through a maiden issuance of non-convertible debentures (NCDs) to retail investors.
The issue comes with a base size of ₹200 crore and an ₹800-crore greenshoe option.
The issue is within the shelf limit of the ₹2,000 crore that the firm intends to raise through NCDs this fiscal. The issue will open on April 22 and close on May 21 (with an option of early closure or extension).
“We are confident that this issue will take us at least till August or September. We will take a call on raising the remaining (amount) later,” JM Financial Managing Director Vishal Kampani told BusinessLine on the sidelines of a press conference in Mumbai.
The firm plans to use the proceeds to lend as capital market loans, corporate loans, and small- and medium-enterprise loans.
As of December 31, 2018, the company’s total assets under management (AUM) stood at ₹6,693 crore, which was earlier guided to grow by 15-20 per cent.
“We have seen good traction in all our segments, whether it is real estate, housing finance, SMEs, capital markets, and corporate lending…. There is a demand for money, but the most important thing in NBFCs is how we manage our risks,” said Kampani.
The company’s average lending ticket size for construction finance is in the range of ₹90-100 crore, corporate loans at ₹60-100 crore, SME finance roughly at ₹5-15 crore, home loans at ₹15-50 lakh, and capital market loans at ₹1-5 crore.
Net profit
The company had posted a net profit of ₹213 crore in FY18, an increase from ₹167 crore recorded in the previous fiscal.
The NCDs would be listed on the BSE. AK Capital Services, JM Financial, and Trust Investment Advisors Pvt Ltd are the lead managers to the issue.
On about the consolidation happening in the NBFC sector, Kampani, who took over as managing director of JM Financial Services Group in 2016, said the “trend is expected to continue”.
“Consolidation in the NBFC space is because of expertise, and in the next next three to four years, I see a couple of other NBFCs merging with banks,” he added.
Another group company, JM Financial Credit Solutions, is also looking to further raise funds through NCDs.
The company will finalise the details of the issue and strategy “shortly”, industry sources added.
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