Shriram Transport's public issue of bonds oversubscribed

The company has mopped up Rs 750.67 cr due to which most investors in retail, HNI category will be alloted debentures

However, according to issue arrangers the oversubscription has been due to retail investors and High Networth Individuals (HNIs). According to issue arrangers, the company has mopped up Rs 750.67 crore due to which most investors in the retail and HNI category will be alloted the debentures.

�The issue was reserved for institutional investors and non-institutional investors to the extent of 10% each. However, that portion did not get subscribed fully due to liquidity tightening,� said a bonds issue arranger.

STFC had planned that about 50% of the issue size will be allocated to individual investors. Out of the remaining, 30% will be for high networth individuals and 10% each for institutional investors and non-institutional investors. However, according to sources  institutional and non-institutional investors subscribed only for about Rs 4 crore out of the Rs 150 crore reserved for them.

According to issue arrangers, there are couple of non-banking finance companies which are considering retail bond issuances, but are not taking it forward because of the liquidity tightening by the Reserve Bank of India.

STFC was offering investors effective yield in the range of 9.65-11.15% for the NCD issue of maturity tenure 3 and 5 years. The plan was to raise Rs 375 crore with a greenshoe option of Rs 375 crore taking the total to Rs 750 crore. The issue had opened on July 16 and was expected to close on Monday. However, since the company was successful in mobilising the amount, they decided to close the issue on Wednesday.

The issue was rated  �AA/Stable� by Crisil and �AA+� by CARE. Each NCD is worth Rs 1,000. The debentures will be listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).