Gold loan provider Manappuram Finance plans to raise Rs 750 crore through the sale of secured redeemable non-convertible debentures (NCDs), with an over-allotment option of Rs 350 crore at 12 per cent for 400 days, and up to 12.2 per cent for two years. The issue opens on August 18 and closes by September 5.
Retail investors and high net worth individuals can subscribe to 35 per cent of the issue. They would be entitled to 12.2 per cent on two-year NCDs. The bonds would be listed on the Bombay Stock Exchange. The debt instruments have been rated 'AA-' by CARE and 'BWR AA-' by Brickwork Ratings agency. Morgan Stanley, AK Capital, Axis Bank and ICICI Securities are the lead managers for the issue.
With 50 per cent of its funding accounted for by commercial banks, Manappuram Finance plans to diversify its sources. "We may raise up to Rs 2000 crore through NCDs in the current financial year," said Managing Director I Unnikrishnan.
The non-banking financial company's gold loan book stood at Rs 6,370 crore as on March 31. "Our existing capital is enough to take the loan book to Rs 15,000 crore in a year," said Unnikrishnan. The company's capital adequacy ratio was 29 per cent at the end of 2010-11, while the average ticket size of loans disbursed against gold was Rs 30,000-35,000 crore. On a quarterly basis, the company's loan book rose 20 per cent in the April-June period. "Of this, I would attribute seven per cent to the appreciation in gold prices," said Unnikrishnan.