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• This is the 2nd debt offer from ISFL since December 2023.
• The maiden debt offer was in the month of December 2023.
• The company is a subsidiary of IIFL Finance Ltd.
• It has posted sudden boost in its financial performance for FY24.
• Well-informed investors looking for steady regular income may park funds for medium to long term.
ABOUT COMPANY:
IIFL Samasta Finance Ltd. (ISFL) the company that was originally incorporated as Colanac Finance Ltd. in August 1995 changed its name to Samasta Microfinance Ltd. in July 2008 and further to its current name in September 2021 is a systematically important Non-Banking Finance (non - deposit accepting or holding) Company - micro Finance Institution (NBFC MFI) in India that offers innovative and affordable financial products to women who are enrolled as members and organized as Joint Liability Group ("JLG") from unbanked sections in society including encompassing cultivators, agricultural laborers, vegetable and flower vendors, cloth traders, tailors, craftsmen, as well as household and industrial workers across rural, semi urban and urban areas in India.
ISFL is a subsidiary of IIFL Finance Limited. It offers wide range of loans tailored for underserved individuals who lack access to traditional banking services and includes income generation loans ("IGL") (to establish a new enterprise or expand an existing business), top-up loans, loan against property, micro enterprise loan, Lifestyle and Family Welfare loans such as dairy cattle loan, sanitation and hygiene, acquisition of daily-use items like cook stoves, water purifiers, solar lights, mobile phones, and other products enhancing their way of life. Going beyond ISFL's financial services, the Company also provides non-financial services, including life and hospicash insurance, along with financial counseling, ensuring comprehensive support for its valued customers.
Its average cost of borrowing in Fiscal 2023 and Fiscal 2024 were 9.98% and 10.52%, respectively. The company has followed a strategy of contiguous branch expansion across regions. As of March 31, 2024, it had presence in 1648 branches in the 21states and one union territory in India through 16519 employees (including trainees), serving an active customer base of 30.01 lakh, as of March 31, 2024.
ISSUE DETAILS:
This is the 2nd NCD issue from the company since December 2023. The base size of the debt issue is Rs. 200 cr. and it has a green shoe option to retain oversubscription to the tune of Rs. 800 cr., thus making an overall debt offer worth Rs. 1000 cr. It has a shelf limit of Rs. 2000 cr. The company will issue 10000000 secured, rated, listed, redeemable, non-i.e. Rs. 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE and NSE.
The company is spending Rs. 15.71 cr. for this NCD issue process, and from the net proceeds, it will utilize at least 75% for onward lending, financing/ refinancing the existing indebtedness of the company and/or repayment/prepayment of interest and principal of existing borrowings, and maximum up to 25% for general corporate purposes.
This debt offer is jointly lead managed by Trust Investment Advisors Pvt. Ltd., Nuvama Wealth Management Ltd., and IIFL Securities Ltd., while Beacon Trusteeship Ltd. is the debenture trustee and Link Intime India Pvt. Ltd. is the registrar to the issue.
This debt offer has tenor of 24 months, 36 months, and 60 months and is offering a coupon rates ranging from 9.20% to 10.50%. The interest payment options are for Monthly or Annual basis, as per the series opted by the investors. The company has allocated 10% for Institutional portion,30% each for Non-Institutional portion, HNI portion and Retail Portion.
CREDIT RATING:
This debt offer is rated CRISIL AA-/Watch Developing by CRISIL Ratings Ltd., and Acuite AA- with positive outlook by Acuite Ratings & Research Ltd. The rating is revised by CRISIL for Tranche II.
Securities with these ratings are considered to have high degree of safety regarding timely servicing of financial obligations. Such securities carry very low credit risk.
However, the rating by CRISIL Ratings Limited continues to be under Rating Watch with Developing Implications which reflects an emerging situation, which may affect the credit profile of the related entity and the rating by Acuite Ratings and Research Limited is under watch with Negative Implications. The Rating Watch reflects an emerging situation, which may affect the credit profile of the related entity.
Rating given by CRISIL Ratings Limited and Acuite Ratings & Research Limited is valid as on the date of this Tranche II Prospectus and shall remain valid on date of issue and allotment of NCDs and the listing of the NCDs on Stock Exchanges unless withdrawn. In case of any change in credit ratings till the listing of NCDs, the Company will inform the investors through public notices/ advertisements in all those newspapers in which pre issue advertisement has been given. The rating is not a recommendation to buy, sell or hold the rated instrument and investors should take their own decisions.
The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The rating agencies have a right to suspend or withdraw the rating at any time on the basis of factors such as new information. There are no unaccepted ratings and any other ratings other than as specified in this Tranche II Prospectus.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, it has posted a total income/ net profit of Rs. 1753.31 cr. / Rs. 128.18 cr. (FY23), and Rs. 2770.73 cr. / Rs. 503.04 cr. (FY24). The financial statement pages are having blur impressions.
Its debt-equity ratio will stand enhanced from 4.43 times (as of March 31, 2024, to 4.93 times post this issue, and net NPAs were 0.33% as of March 31, 2024. As of the said date, its equity capital of Rs. 668.44 cr. was supported by reserves worth Rs. 1341.28 cr.
Review By Dilip Davda on June 1, 2024
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The IIFL Samasta Finance NCD Tranche II May 2024 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if IIFL Samasta Finance NCD Tranche II May 2024 worth investing. The IIFL Samasta Finance NCD Tranche II May 2024 Note sets the NCD expectations in systematic way which tells you if IIFL Samasta Finance NCD Tranche II May 2024 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in IIFL Samasta Finance NCD Tranche II May 2024 by providing NCD recommendations i.e. subscribe, avoid and neutral.
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