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IIFL Finance on Friday said it will launch a public issue of bonds next week to raise up to Rs 1,000 crore to augment its capital base.
Backed by Fairfax and CDC Group, IIFL Finance will issue unsecured redeemable non-convertible debentures (NCDs), with a base issue size of Rs 100 crore and a green-shoe option to retain oversubscription of up to Rs 900 crore, aggregating to Rs 1,000 crore, the company said in a release.
The public issue of bonds will open on March 3, 2021 for the purpose of business growth and capital augmentation.
The IIFL bonds offer highest yield of 10.03 per cent per annum for tenor of 87 months, it said adding the NCD is available in various options like monthly, annual and at maturity.
The company said that in the current scenario, the rate of interest offered by it is very attractive compared with other debt products.
"Through a strong physical presence of 2500 branches across India and a well-diversified retail portfolio, IIFL Finance caters to the credit need of underserved population. The funds raised will be used to meet credit need of more such customers and accelerate our digital process transformation to enable a frictionless experience, Rajesh Rajak, CFO, IIFL Finance said.
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IIFL Finance's loan assets under management stand at Rs 42,264 crore as on date. The company's 90 per cent of the book is retail which is focused on small ticket loans.
Its gross NPA is at 1.61 per cent and net NPA at 0.77 per cent. The company registered a net profit of Rs 268 crore in December quarter 2020-21, up by 26 per cent from the year-ago period. The return on equity was 18.4 per cent.
The lead managers to the public issue of bonds are Edelweiss Financial Services, IIFL Securities and Equirus Capital.
The NCDs will be listed on BSE and NSE to provide liquidity to investors, it said.
Bonds would be issued at face value of Rs 1,000 each and the minimum application size is Rs 10,000 across all categories. The issue will close on March 23 with an option of early closure.
The allotment will be made on first come first served basis, IIFL Finance said.
IIFL Finance stock was trading at Rs 274.35 on BSE, down 1.24 per cent from previous close.
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