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About Company:
Shriram Transport Finance Co. Ltd. (STFCL) is a flagship company of Shriram group of south and is one of the largest asset financing non-banking finance companies in the organized sector in India that catering to first time buyers ('FTB') and small road transport operators ('SRTOs') for financing preowned commercial vehicles. In addition, it provides commercial vehicle finance for new commercial vehicles. STFCL also provides financing for passenger commercial vehicles, multi-utility vehicles, three wheelers and tractors as well as ancillary equipment and vehicle parts finance, such as loans for tyres and engine replacements, and provide working capital facility for FTBs and SRTOs. The company offers financial services to commercial vehicle operators, thereby providing comprehensive financing solutions to the road logistics industry in India.
Debt Offer Detail:
For the purpose of onward lending, financing, refinancing the existing indebtness and long term working capital needs (75% of fund mobilized) as well as general corpus fund need (25% of fund mobilized), STFCL is coming out with debt offer of Secured and/or Unsecured subordinated Redeemable Non-Convertible Debentures of Rs 1000 each for Rs 300 crore (base size) with a green shoe option to retain oversubscription aggregating up to Rs 10000 crore. STFCL has overall self limit of Rs 10000 crore worth of debt issue.
Issue opens for subscription on 17.07.2019 and will close on or before 16.08.19. Minimum application is to be made for 10 NCDs (i.e. Rs 10000) and in multiple of 1 NCD (i.e. Rs 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE and NSE. Allotment will be done on 'First come-first served' basis. Application is to be made in ASBA mode only. This is the 11th debt offer from the company since July 2009. Allotment will be done on 'First Come – First Served' basis.
This issue is rated as CRISIL AA+/Stable by CRISIL, CARE AA+/Stable by CARE and IND AA+/Stable by India Ratings. This rating indicates that instruments with such ratings are considered to have highest degree of safety regarding timely servicing of financial obligations and carry very low credit risk.
Issue is jointly lead managed by J M Financial Ltd., A K Capital Services Ltd., Edelweiss Financial Services Ltd. and SMC Capitals Ltd. While Catalyst Trusteeship Ltd. is the debenture trustee Integrated Registry Management Services Pvt. Ltd. is the registrar to the issue.
These NCDs have tenures of 30 months, 42 months, 60 months and 84 months. It offers coupon rates ranging from 9.12% to 9.70% based on the choice of investors. Frequency of interest payments will be monthly, annually or cumulative as per the choice of investors. This time it is offering additional 0.25% to Senior Citizens. Allotment of these NCDs will be in dematerialized mode only. There is no put and call options.
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Series* |
I |
II |
III |
IV |
V |
VI |
VII |
VIII |
IX |
X |
|---|---|---|---|---|---|---|---|---|---|---|
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Interest type |
Fixed |
Fixed |
Fixed |
Fixed |
Fixed |
Fixed |
Fixed |
Fixed |
Fixed |
Fixed |
|
Interest reset process |
NA |
NA |
NA |
NA |
NA |
NA |
NA |
NA |
NA |
NA |
|
Frequency of Interest Payment |
Monthly |
Monthly |
Monthly |
Annual |
Annual |
Annual |
Annual |
Cumulative |
Cumulative |
Cumulative |
|
Tenor |
42 months |
60 months |
84 months |
30 months |
42 months |
60 months |
84 months |
42 months |
60 months |
84 months |
| Coupon (percent.) for all categories of investors |
9.12% |
9.22% |
9.31% |
9.30% |
9.50% |
9.60% |
9.70% |
NA |
NA |
NA |
|
Effective Yield (percent per annum)(Approx) for all Investor categories** |
9.50% |
9.61% |
9.71% |
9.33% |
9.52% |
9.59% |
9.69% |
9.50% |
9.60% |
9.70% |
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Redemption amount (Rs. per NCD) |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
1,374.75 |
1,582.25 |
1,912.80 |
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Put and Call Option |
NA |
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Redemption Date(Months from the Deemed Date of Allotment) |
42 months |
60 months |
84 months |
30 months |
42 months |
60 months |
84 months |
42 months |
60 months |
84 months |
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Minimum Application |
Rs 10,000 (10 NCDs) across all Series |
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In multiples of thereafter |
Rs 1,000 (1 NCD) |
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Face Value/Issue Price of NCDs (Rs/NCD) |
Rs 1,000 |
|||||||||
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Mode of Interest Payment |
Through various mode available |
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* Our Company shall allocate and allot Series VII NCDs wherein the Applicants have not indicated their choice of the relevant NCD Series. Therefore, instructions will be given to the Designated Intermediaries to indicate Series VII as the Applicant's choice of the relevant NCD Series wherein the Applicants have not indicated their choice. If the Deemed Date of Allotment undergoes a change, the coupon payment dates, Redemption Dates, Redemption Amounts and other cash flow workings shall be changed accordingly.
** The initial allottees under Category III and Category IV in the proposed Tranche 1 Issue who are Senior Citizens on the Deemed Date of Allotment shall be eligible for an additional incentive of 0.25% p.a. provided the NCDs issued under the proposed Tranche 1 Issue are continued to be held by such investors under Category III and Category IV on the relevant Record Date for the relevant Interest Payment Date for Series I, Series II, Series III, Series IV, Series V, Series VI and/or Series VII. Accordingly, the amount payable on redemption to such Senior Citizens for NCDs under Series VIII, Series IX and Series X is Rs 1,385.80, Rs 1,600.40 and Rs 1,943.55 per NCD respectively provided the NCDs issued under the proposed Tranche 1 Issue are continued to be held by such investors under Category III and Category IV on the relevant Record Date for the relevant Redemption Date for the Series VIII, Series IX and Series X.
On any relevant Record Date, the Registrar and/or Company shall determine the list of the holder(s) of this Tranche 1 Issue and identify such Investors/ NCD Holders (based on their DP identification and /or PAN and/or entries in the Register of NCD Holders) and make the requisite payment of additional incentive.
Senior Citizen Applicants making online applications through electronic mode should provide the copy of their PAN card by quoting their Application number, Demat Account number to the Registrar either through email / post / courier, for availing additional incentive applicable for Senior Citizens
Other Senior Citizen Applicants, applying by submitting the application form physically through the Designated Intermediaries at the respective Collection Centres/ SCSBs, should enclose the copy of PAN Card along with their application, for availing additional incentive applicable for Senior Citizens.
On any relevant Record Date, the Registrar and/or Company shall determine the list of the holder(s) of this Tranche 1 Issue and identify such Investors/ NCD Holders (based on their DP identification and /or PAN and/or entries in the Register of NCD Holders) and make the requisite payment of additional incentive.
Senior Citizen Applicants making online applications through electronic mode should provide the copy of their PAN card by quoting their Application number, Demat Account number to the Registrar either through email / post / courier, for availing additional incentive applicable for Senior Citizens
Other Senior Citizen Applicants, applying by submitting the application form physically through the Designated Intermediaries at the respective Collection Centres/ SCSBs, should enclose the copy of PAN Card along with their application, for availing additional incentive applicable for Senior Citizens
The initial Allottees under Category III and Category IV in the proposed Tranche 1 Issue who are Senior Citizens on the Deemed Date of Allotment shall be eligible for an additional incentive of 0.25% p.a. provided the NCDs issued under the proposed Tranche 1 Issue are continued to be held by such investors under Category III and Category IV on the relevant Record Date applicable for payment of coupon.
Financial Data:
On a consolidated basis, STFCL has posted total revenue/net profits of Rs 13506.20 cr. / Rs 2546.39 cr. (FY18), Rs 15545.70 cr. / Rs 2563.99 cr. (FY19).
Post issue, its current debt equity ratio of 5.55 will stand enhanced to 6.18 times. As on 31.03.19 its paid up equity capital of Rs 226.91 crore is supported by free reserves of Rs 15735+ crore.
Investors looking for steady regular income may consider investment in this AA/Stable rated NCD issue for long term. (Subscribe for long term)
Review By Dilip Davda on July 15, 2019
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 prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.
(SEBI registered Research Analyst-Mumbai).
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.
Email: dilip_davda@rediffmail.com
The Shriram Transport Finance NCD July 2019 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if Shriram Transport Finance NCD July 2019 worth investing. The Shriram Transport Finance NCD July 2019 Note sets the NCD expectations in systematic way which tells you if Shriram Transport Finance NCD July 2019 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Shriram Transport Finance NCD July 2019 by providing NCD recommendations i.e. subscribe, avoid and neutral.
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