ECL Finance Ltd. (ECLFL) is the Edelweiss group’s finance sector arm. It is one of the leading systemically important non-deposit taking NBFCs, focused on offering a broad suite of secured corporate loan products, retail loan products which are customized to suit the needs of the corporates. The company is offering a fourth tranche of NCDs.
THE NCD
For the purpose of onward lending and repayment of interest and principal of existing loans (75% of fund mobilized) as well as general corpus fund need (25% of fund mobilized), ECLFL is coming out with its fourth debt offer (since January 2014) under Tranche-I with a Secured Redeemable Non-Convertible Debentures of Rs. 1000 each for Rs. 500 crore with a green shoe option to retain oversubscription to the tune of Rs. 1500 crore making the total issue size of Rs. 2000 crore.
Issue opens for subscription on 24.07.18 and will close on or before 16.08.18. 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, the NCDs will be listed on BSE and NSE. This issue is rated as CRISIL AA/Stable by CRISIL and ICRA AA/Stable by ICRA. This rating indicates that instruments with such ratings are considered to have a high degree of safety regarding timely servicing of financial obligations.
Such instruments carry very low credit risk. Issue is jointly lead managed by Axis Bank Ltd. and Edelweiss Financial Services Ltd. Link Intime India Pvt. Ltd. is the registrar to the issue. Beacon Trusteeship Ltd. is the debenture trustee.
YOUR RATE OF RETURN
These NCDs have tenures of 3 yrs, 5 yrs and 10 years. It offers coupon rates ranging from 9.25% to 9.85% based on selection of investors. Frequency of interest payments will be Monthly, Annually or cumulative as per the choice of investors. This issue has no Put and Call options. It also has a floating interest rate option available under Series VIII of this issue for 3 year term only. Floating rate interest on such NCDs is total of Reference Overnight MIBOR on an annualized basis plus the fixed spread of 2.50%.
Allotment will be made on “first come-first served” basis. Allotment of these NCDs will be in dematerialized mode only.
As on March 31, 2018 it had a total of 102 branches. Its total loan book stood at Rs. 22008 crore as on 31.03.18. On the said date, its capital adequacy ratio was 17.09% against RBI stipulated minimum requirement of 15%. As at 31.3.18 its gross NPA were 1.82% as a percentage of total loan book and net NPAs were 0.75% for the said date.
For FY16 and FY17 its net NPAs were 0.49% and 0.64% respectively. Post issue its debt-equity ratio will stand increased to 8.27 from 7.58 at present. Company posted net profits of Rs. 246.06 cr. (FY16), Rs. 384.93 cr. (FY17) and Rs. 479.56 cr. (FY18).
CONCLUSION
Investors looking for steady regular income may consider investment for long term in this AA/Stable rated NCD issue. (Subscribe).
