Dewan Housing Finance Corp Ltd (DHFCL) is a deposit-taking housing finance company registered with the NHB and focused on providing financing products for the LMI segment in India primarily in Tier II and Tier III cities and towns. DHFCL has been active in the housing finance sector since 1984. It provides secured finance primarily to individuals, partnership firms and companies for the purchase, self-construction, improvement and extension of homes, new and resalable flats, commercial properties and land. The company also provides certain categories of non-housing loans including loans for commercial property, medical equipment, and for plant and machinery.
DHFCL has a robust marketing and distribution network, with a presence across 349 locations including 182 branches, 146 service centers, 18 circle/ cluster offices, 2 disbursement hubs and one collection centers. In addition to its network within India, it has international representative offices located in London and Dubai.
To meet its working capital and repayment of existing debts, the company is coming out with a mega debt offer of Secured Non-Convertible Debentures with a face value of Rs 1000 each. The company plans to mobilize Rs 1000 crore under Tranche-I and has a green shoe option for retaining oversubscription up to Rs 4000 crore. Thus the aggregate size of the offer is the first such offer from private sector housing finance company so far. The offer is being made on “First come – First Served” basis. Minimum application is to be made for 10 NCDs and in multiple of 1 NCD thereon, thereafter. The company has reserved 20% for QIBs, 20% for corporate, 30% for HNI and 30% for Retail category of investors. It has multi options of tenures and interest payments. Issue opens for subscription on03.08.16 and will close on or before 16.08.16.
It is offering interest payments on Monthly, Annually or Cumulative mode as per the choice of investors. The coupon rates are ranging from 8.74% to 9.30% and tenure of 3 yrs, 5 yrs and 10 yrs. For the first time, this company is offering CPI (Consumer Price Index) based coupon rate for 3 yrs. Post issue its debt-equity ratio will stand enhanced to 12.04 from 11.25 (on consolidated basis). These NCDs will be listed on BSE and NSE. Although allotment is available in demat as well as physical mode, trading will take place in demat mode only.
Conclusion: Offers with “AAA” rating is most preferred by investors in debt market. Hence this offer is worth considering for investment for steady interest income.
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. (Writer is a SEBI registered Research Analyst).