Manappuram Finance Ltd, a non-banking finance company , invites small depositors to invest in its retail non convertible debentures(NCDs) as the issue offers higher returns than banks and has highest safety ratings.
The Thrissur -based company has come out with a ₹1,000-crore NCD issue. The tranche 1 of the issue opened for subscription on October 24 and is scheduled to close on November 22 with an option of early closure or extension. The base issue size of the tranche 1 issue is ₹200 crore with an option to retain oversubscription up to ₹800 crore.
“We are targeting small depositors through this NCD issue. Minimum amount one can invest is ₹10,000. Strong banks offer 7-7.5 per cent interest a year whereas the yield from this NCD is 10.46 per cent, which is 40-45 per cent higher. If someone is getting an interest income of ₹ 10,000 per year, he will be able to get about ₹15,000 by investing in our NCDs,” said V P Nandakumar, Promoter, Managing Director & CEO of Manappuram Finance Ltd here.
“Small investors will also worry about safety as they would park the money in NCDs for many years. Our issue has very high safety ratings – AA+ – by professional agencies, he said. Also, the NCDs carry the advantage of liquidity as they will be listed on Bombay Stock Exchange. “These are tradable and one gets money anytime if he/she needed for any emergency situation,” he added.
Highlighting that the company has a sound financial position in the NBFC segment, he said the company was strengthening its non-gold lending segments as part of diversification plans.
Its commercial vehicle portfolio is close to ₹1,000 crore now and the company intends to consolidate this business going forward. Its microfinance business will get more focus as growth has come back in the segment. The company is also lending to affordable home buyers and the AUM (assets under management) of housing finance segment was about ₹407 crore in Q1 of this fiscal.
The company’s total AUM has crossed ₹17,000 crore, of which gold loans account for about 75 per cent. The company’s capital adequacy ratio is more than 25 per cent, which is significantly higher than the prescribed rate of 12 per cent. Its return on assets and return on equity were more than four per cent and 20 per cent respectively.