Edelweiss' NBFC arm ECLF to raise up to Rs 20 bn via public issue of bonds

The public issue of secured redeemable non-convertible debentures will offer an interest rate of 9.45 per cent per annum for 36-month tenure; 9.65 per cent for 60 months and 9.85 per cent for 10 years

ECL Finance (ECLF) on Thursday said it will raise up to Rs 20 billion through a public issue of bonds.

The NBFC arm of Edelweiss Financial Services will go for "the public issue of secured redeemable non-convertible debentures (NCDs) of the face value of Rs 1,000 each, aggregating to Rs 5 billion, with an option to retain over-subscription up to Rs 15 billion aggregating to a total of Rs 20 billion", the parent firm said in a release.

The NCDs will offer an interest rate of 9.45 per cent per annum for 36-month tenure; 9.65 per cent for 60 months and 9.85 per cent for 10 years.

Besides, there will be a floating rate option linked to the overnight Mumbai Inter-Bank Offer Rate (MIBOR) under which subscribers can earn the average annualised overnight MIBOR plus 2.5 per cent per annum for 3 years, Edelweiss said.

"The funds raised through this issue will be used for onward lending purposes, for refinancing the existing borrowing and general corporate purposes," it added.

Edelweiss said the instruments are considered to have a high degree of safety for timely servicing of financial obligations and carry very low credit risk given the CRISIL AA/stable and ICRA AA (stable) ratings.

ECLF had reported a net profit of Rs 4.62 billion and total income of Rs 30.6 billion in fiscal ended March 2018.

Axis Bank and Edelweiss Financial Services are the lead managers for the issue which opens on July 24, and closes on August 16, with an option of early closure.

Edelweiss said the bonds will be listed on BSE and NSE to provide liquidity to investors.

ECLF is primarily engaged in corporate lending, providing finance to industrial enterprises, SMEs and individuals, and investment in other securities.

Edelweiss Financial Services stock was trading 1.65 per cent down at Rs 280.85 on BSE.