Manappuram Finance launches NCDs; issue size Rs 100 crore

Kerala-based gold loan non-banking finance company (NBFC) Manappuram Finance Ltd on Monday launched a public issue of secured, redeemable non-convertible debentures (NCDs) with an issue size of Rs 100 crore.

 

The issue will also have a green shoe option of an equal amount, Manappuram Finance chief executive and managing director V P Nandakumar told reporters here.

 

The green shoe option is a provision contained in an underwriting agreement that gives the underwriter the right to sell investors more shares than originally planned by the issuer.

 

The tenure of the debentures, which will have a face value of Rs 1,000 each, would range from 400 days to 70 months, he said, adding, the issue would be utilised in augmenting the capital expenditure and meeting the working capital requirements.

 

If this issue is successful, the company could come out with more NCDs in the coming months as it has already got a long-term credit rating of 'A/negative' from CRISIL for the current issue for an amount of up to Rs 300 crore.

 

The NCDs will have effective yield of 12.61 per cent per annum.

 

There is huge scope for expansion in gold loans as not even one-10th of the total family gold in the country, has been monetized, he said. It is estimated that there is 25,000 tonnes of family gold in the country. 

 

Manappuram has over 50 tonnes of gold in its lockers, he said.

 

The issue will close on January 20, executive director and deputy CEO I Unnikrishnan said.

 

This is the second public issue by Manappuram, which had launched a public issue two years ago.

 

MFL reported a net profit after tax of Rs 208.432 crore for fiscal year 2013.

 

It had a net worth of Rs 2443 crore and capital adequacy of 22.67 per cent as of March 31, 2013.