IFCI to raise Rs 790 cr in second tranche of NCD issue

State-owned term lender IFCI is looking at raising over Rs 790 crore in the second round of non-convertible debentures which opened on January 1.

The company had raised Rs 1,209.19 crore in October in the first round of the Rs 2,000 crore issue for the current financial year 2014-15. The NCDs are being offered in tenors of 5 years and 10 years. The issue will close on February 4.

"IFCI is proposing a public issue of secured redeemable non-convertible debentures of face value of Rs 1,000 each amounting to Rs 250 crore (Base Issue Size) with an option to retain over-subscription aggregating up to the Residual Shelf Limit of Rs 790.81 crore," the company said.

The proceeds will be used for general corporate and lending purposes, it said.

"This is the best option available in the present interest rate scenario, looking at the rates offered by government securities (at around over 8 per cent). Coupon rate of 9.5 per cent is very attractive," said Malay Mukherjee, Managing Director, IFCI Ltd at a press conference here today.

NCDs with a tenure of 5 years, with annual coupon payout option, will carry coupon rate of 9.35 per cent per annum for all categories of investors. It will carry additional incentive of 0.10 per cent for High Networth Individuals (HNIs) and Retail Individual Investors (RII)

"...The aggregate of coupon rate and additional incentive for HNIs and RII is 9.45 per cent per annum," IFCI said.

For 10-year tenure, the bonds will carry coupon rate of 9.40 per cent per annum for all kind of investors. HNIs and RII will have incentive of additional 0.10 per cent at 9.50 per cent.

Besides, the company will also offer NCDs with premium on redemption option for both the tenors.

"NCDs with a tenure of 5 years will be redeemed on the maturity at Rs 1,563.87 (for QIBs and corporates) and Rs 1,571.04 (for HNIs and RII).

"The NCDs with tenure of 10 years will be redeemed on maturity at Rs 2,457.50 (for QIB and corporates) and Rs 2,480.08 (for HNIs and RII)," it added.

The IFCI Ltd scrip closed at Rs 38.05, down 0.13 per cent, on the BSE.