Manappuram Finance Ltd. (erstwhile known as Manappuram General Finance & Leasing Ltd.) is primarily engaged in gold loan financing activities and now mulls diversification in other NBFC activities. The company that outperformed the sector till fiscal 2011-12 marked sharp drop in bottom line of almost 65% for the fiscal 2012-13.
The company is a frequent visitor to debt market with its fund raising exercise. This time, it is coming out with an offer of Secured Non-Convertible Debentures of Rs. 1000 each to mobilize Rs. 100 crore as a base offer with a green shoe option to retain additional Rs. 100 crore taking the overall size of the offer to Rs. 200 clrore. Funds so mobilized will be used for its capital expenditures and working capital requirements. The issue opens for subscription on 05.03.14 and will close on or before 25.03.14.
Minimum application is to be made for 10 NCDs and in multiple of 1 thereon, thereafter. The bonds have a tenure ranging from 400 days to 70 months and coupon rate of 11.50% to 12.50% with options of cumulative, monthly and annually payment mode giving an yield ranging from 11% to 12.94%. Yield of 11% is only on 400 days cumulative offer. These NCDs are rated by ICRA as ICRA/A+ indicating adequate degree of safety regarding timely servicing of financial obligations but carry a low credit risk.
ICICI Securities Ltd is the sole lead manager to this debt offer and Link Intime India Pvt. Ltd. is the registrar to the issue. Post allotment these NCDs will be listed on BSE. The allotment of these NCDs is available in demat and physical mode, but trading will take place in demat mode only.
Remarks: A Risky offer