Shriram Transport Finance Company Limited

Shriram Transport Finance Company Limited (STFC) plans to enter the debt capital market on June 27 with a public issue of secured non-convertible debentures (NCDs) of the face value of Rs.1, 000 each. The issue size is Rs.500 crore with an option to retain oversubscription up to Rs.500 crore for issuance of additional NCDs aggregating Rs.1,000 crore.

The proposed NCDs have been rated ‘AA/Stable' by Crisil and ‘CARE AA+' by CARE. The rating by Crisil indicates high degree of safety with regard to timely payment of interest and principal, while that by CARE indicates high safety for timely servicing of debt obligations. The NCDs offered through this draft prospectus are proposed to be listed on the National Stock Exchange (NSE).

The issue will be open from June 27 to July 9 with an option to close earlier and/or extend up to a period at the discretion of the duly authorized committee of directors of the company, subject to necessary approvals. The funds raised through this issue will be used for various financing activities including lending and investments, to repay existing loans and for business operations including capital expenditure and working capital requirements.

PTI reports:

“We have already raised (funds) twice earlier. This is the third time we are coming to the market for raising resources,” Managing Director, R Sridhar, told reporters here. The money will be raised through three-year and five-year bonds.

The five-year bonds will have a put and call options at the end of the fourth year. The company will pay an interest of 11.6 per cent to a reserved category of retail investors, 11.35 per cent to an unreserved category of retail investors and 11.1 per cent to other investors on the five-year bonds.

On the three-year bonds, the company will pay 11.35 per cent coupon to the reserved category of retail investors, 11.1 per cent to the unreserved and 11 per cent to other investors.

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