Pune based realty developer DS Kulkarni group is a well diversified group of Pune having prime interest in realty development and also in other business like Auto Dealers, IT solutions, Power Generation etc .
The company has undertaken a mega realty project under the brand name of “DSK Dream City” that is coming up fast at Mumbai-Hyderabad Highway near Pune and will have a total capital outlay of around Rs. 851 crore. The company is planning to get 40% finance by way of advance from customers, 20% from Banks as loan and remaining to be tied up in other mode. To meet around 20% funding, the company is coming out with a Secured Redeemable Non-Convertible Debentures having face value of Rs. 5000 each and coupon rate ranging from 12.5% to 12.75% with additional rate of 0.25% to special category consisting of Women (as first holder), DSK group employees, existing shareholders, Senior Citizens, Servicemen and Ex-servicemen. Thus this debt issue gives an attractive yield of around 13.37% to 13.80% per annum. Tenure for this offer ranges from 36 months to 84 months. Under category I, II and IV respectively for 36 months it has quarterly interest payment mode, for 66 months cumulative mode and for 84 months monthly payment mode. For category III which has a NCD with face value of Rs. 25000 it is annually but this category has staggered redemption mode. Post allotment these NCDs will be listed on BSE. Issue opens on 04.08014 and will close on or before 26.08.14 depending on the response. Basic issue size is of Rs. 100 crore and with green shoe option allowing keeping hundred percent oversubscription, the total issue size is Rs. 200 crore.
The offer is rated as CARE BBB+ indicating at moderate degree of safety regarding timely servicing of financial obligations and has also carry moderate credit risk.
Minimum application is to be made for 5 NCDs for category I, II and IV and 1 NCD for category III (i.e. minimum Rs. 25000) and in multiple of 1 NCD thereof, thereafter. These debentures are available in demat and physical mode, but trading will take place in demat mode only. All non-ASBA applicants will be paid interest at the rate of 7% p.a. on the amount allotted and 6% on the refundable amount.
The issue is lead managed by SBI Capital Markets Ltd and Link Intime India Pvt Ltd is the registrar to the issue. GDA Trusteeship Ltd is the Debenture Trustee.
Remark: Although the offer has lucrative coupon rate, due to poor rating, moderate investment recommended.