DHFL's NCD subscribed over 6 times, issue to close tomorrow

Mortgage lender Dewan Housing Finance Corporation's issue of non-convertible debentures (NCDs) was subscribed by over 6 times on the first day today.
Further, the company has decided to close to the issue tomorrow, nearly two weeks ahead of earlier scheduled closure - September 12.
The company's NCDs issue comprises base issue Rs 2,000 crore, with an option to retain over-subscription up to Rs 8,000 crore aggregating up to shelf limit of up to Rs 10,000 crore.
"We are overwhelmed with the response shown by the investors on our second consecutive NCD public issue, which is oversubscribed by 6.32 times has attracted a subscription of around Rs 12,645 crore from investors on first of the NCD issue as per the initial data available on the stock exchanges," DHFL CMD Kapil Wadhawan said in a statement.

The Finance Committee of the board has decided to close the NCD issue on August 30, it said. The issue was scheduled to close on September 12.
The retail individual investor category has been oversubscribed by more than 3.12 times, he said, adding, the success of both our NCDs has set a benchmark in the capital markets and will further deepen the debt markets with wider public participation.

The investors' confidence is also a reflection of the government's focus on affordable housing and the housing for all policy, he added.
The net proceeds of the issue will be used for funding loan growth.

This was the company's second NCD issue. The mortgage lender's maiden issue, which opened earlier this month, was subscribed nearly 19-times on its first day with an overall subscription of about Rs 19,000 crore.
DHFL's issue comprised Rs 1,000 crore with an option to retain over-subscription of up to Rs 3,000 crore, aggregating to shelf limit of Rs 4,000 crore.
The follow-on secured NCD issue has a 7-year tenor with annual frequency of interest payment. The interest rate on proposed NCDs varies between 9.05 per cent to 9.25 per cent.
Retail individual investors and High Net Worth Individuals (HNIs) have a combined allocation ratio of 60 per cent.

"Response is overwhelming, particularly from QIB's, Corporates and HNIs. There is good response from retail investors too. Overall, this signifies that there is large appetite for rated corporate bonds as long as they assure higher interest as compared to bank FD's and prevailing inflation rates," said Anil Chopra Group CEO and Director at Bajaj Capital.