DHFL to raise Rs 4,000 crore via inflation-linked NCDs

Mortgage lender DHFL on Monday said it plans to raise up to Rs 4,000 crore through a maiden issue of non-convertible debentures (NCDs), where investors have the option of linking the coupon with retail inflation.

The company proposes to issue secured redeemable NCDs of face value of Rs 1,000 each aggregating up to Rs 4,000 crore, DHFL Chairman and Managing Director Kapil Wadhawan said.

The issue size is Rs 1,000 crore with an option to retain over-subscription up to Rs 4,000 crore, he said.

For investors, there will be an option to choose between three, five and ten year tenors with monthly, annual and cumulative payment options, he said.

 

The annual yield will go up to 9.2-9.3%, depending upon the class of investors – whether retail or high networth individual – and the tenor.

"We are offering an innovative floating instrument in the form of Consumer Price Index (Inflation) linked instrument that has a coupon rate currently of 9.10% for Category I and II investors and 9.20% for Category III and Category IV investors (domestic retail and HNI investors) respectively," he said.

The NCD issue is one of the various funding sources to optimise funding costs and maintain a diverse funding portfolio that will enable us to achieve funding stability and liquidity, he added.

The net proceeds of the issue will be used for onward lending, financing and general corporate purposes, he added.

The issue will open for subscription on August 3 and close on August 16.