IIFL Finance retail bonds issue oversubscribed 5.67 times, may close early.
IIFL Finance, one of India’s largest Non-Banking Financial Companies today said that its retail bonds base issue has received overwhelming response and was oversubscribed by 5.67 in just 5 days of its issuance of September 27. IIFL Finance said, it has received bids worth Rs 566.79 crores at the end of day on October 1. The public issue closes on October 18, 2021, with an option of early closure. The allotment will be made on first come first served basis.
The Fairfax -backed IIFL Finance has issued secured redeemable non-convertible debentures (NCDs), aggregating to Rs 100 crore, with a green-shoe option to retain over-subscription up to Rs 900 crore (aggregating to a total of Rs 1,000 crore) for the purpose of business growth and capital augmentation.
Rajesh Rajak, CFO, IIFL Finance said, “Looking at the response on day one itself, we would watch for next few days and take a call on early closing. The allotment will be made on first come first served basis.” The bonds issue has seen robust demand across all categories – retail, individual, corporate and institutional – which is a testament of investors’ trust in IIFL Group’s 25 year legacy and successful track record in public issues.
The IIFL bonds offer highest effective yield of 8.75% per annum for tenor of 60 months. The company will also offer an incentive of 0.25% per annum for existing bond or equity shareholders of the company. The NCD is available in tenors of 24 months, 36 months, and 60 months. The frequency of interest payment is available on monthly, annual and at maturity basis for 60 months tenor, while for other tenors it is available on annually and at maturity basis.
The credit rating has been AA/Stable by Crisil and AA+/negative by Brickwork, which indicates that the instruments are considered to have a high degree of safety for timely servicing of financial obligations and carry very low credit risk.
IIFL Finance has over 2500 branches and Loan Assets under Management of Rs 43,160 crore as on June 30, 2021. Most importantly, 93% of the book is retail – which is focused on small ticket loans. IIFL Finance has consistently maintained low level of NPAs over the years of operations and continues to focus on good quality of assets with gross NPA of 2.21% and Net NPA of 1.02%.
In Q1 FY22, IIFL Finance reported a profit after tax of Rs 266 crore, up 735% on year with a robust return on equity of 19.7%. It has strong relationship with multiple banks and financial institutions.
The lead managers to the issue are Edelweiss Financial Services Limited, IIFL Securities Limited and Equirus Capital Private Limited. The NCDs will be listed on the BSE Limited and National Stock Exchange of India Limited (NSE), to provide liquidity to investors. The IIFL Bonds are issued at face value of Rs 1,000 and the minimum application size is Rs 10,000 across all categories.