Srei Equipment's NCD issue opens, to raise up to Rs 500 crore

Srei Equipment Finance on Monday said it will raise up to Rs 500 crore through a public issue of bonds.

The wholly-owned subsidiary of Srei Infrastructure Finance (Srei Infra) said the first tranche of the public issue of secured redeemable non-convertible debentures (NCDs), which opened on Monday, will close on September 18, 2019.

"The issue is of face value of Rs 1,000 each amounting up to Rs 100 crore (base issue size) with an option to retain oversubscription up to Rs 400 crore, totalling up to Rs 500 crore," Srei Equipment said in a release.

The highest coupon rate is 10.65 per cent per annum for investors of all the categories for tenor of five years.

For all categories of investors for tenor of three years, the highest coupon rate is 10.40 per cent. For tenor of two years, the highest coupon rate is 10.25 per cent, while for the tenor of 1 year 1 month, the annualised yield is 10.01 per cent.

An additional incentive of 0.25 per cent will be offered to all the categories of investors in the proposed issue, who are also holders of bonds previously issued by Srei Equipment or Srei Infra in past public issues of NCDs, the company said.

Those who are equity shareholders of Srei Infra or senior citizens or existing employees of Srei Group will also be entitled for this benefit.

However, any category of investors subscribing to series I NCDs having tenor of one year one month will not be eligible for any additional incentive, it added.

"With growing pressures on interest rates of fixed deposits coupled with volatility in the equities market, prudent retail investors are eagerly looking towards safe and stable savings opportunities. Our NCD offering fills up that very space of an alternate savings tool," Devendra Kumar Vyas, managing director at Srei Equipment Finance, said.