Kosamattam Finance Limited NCD

NCD Detail

Kosamattam Finance Limited NCD is launching a debt offering that will be open for subscription from April 11 to April 25, 2023. A non-deposit-taking NBFC, Kosamattam Finance Ltd, primarily focuses on providing gold loans by lending money against household jewelry pledges in Kerala, Karnataka, Tamil Nadu, Andhra Pradesh, Maharashtra, Delhi, Gujarat, and Telangana, as well as the Union Territory of Puducherry. Besides gold loans, the company offers various fee-based ancillary services, including microfinance, money transfer, power generation, foreign currency exchange, agriculture, and air ticketing services. As of October 31, 2022, Kosamattam Finance boasts a network of 997 branches, with a strong presence in Southern India.

The company’s competitive strengths include its affiliation with the Kosamattam Group, one of South India’s leading financial service groups, led by Mathew K. Cherian and headquartered in Kottayam, Kerala. Additionally, the company benefits from a widespread branch network in rural and semi-urban areas throughout South India, a well-organized and efficient IT infrastructure, and an experienced management team with skilled personnel.

About Company

Kosamattam Finance Ltd. (KFL) is a systemically significant non-deposit-taking NBFC, primarily focusing on the Gold Loan business. They lend money against the household jewellery pledge in states such as Tamil Nadu, Kerala, Karnataka, Delhi, Andhra Pradesh, Maharashtra, Gujarat, and Telangana, as well as the Union Territory of Puducherry. Since April 2014, the company has made 27 debt offers. KFL is an IRDA-registered composite corporate insurance agent and holds SEBI registration as an FFMC and depository participant to act as a money changer. Additionally, KFL is an AMFI-registered mutual fund advisor and has registration from LEIL. Their last offer was in December 2022.

Besides its core Gold Loan business, KFL offers various fee-based ancillary services, including microfinance, money transfer services, foreign currency exchange, power generation, agriculture, and air ticketing services, demonstrating diverse business activities.

As of January 31, 2023, KFL had a network of 980 branches across Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Delhi, Maharashtra, Gujarat, and Telangana, as well as the Union Territory of Puducherry. They employed 3,663 people in business operations. Both the number of branches and human resources have declined compared to the last offer period. KFL continues to be a South-centric player in the segment.

Issue Details

KFL is launching a debt offering consisting of Secured and Unsecured Redeemable Non-Convertible Debentures (NCDs) at Rs 1,000 each, totaling Rs 150 crores, with a green shoe option to retain oversubscription up to Rs 150 crores. This brings the total issue size to Rs 300 crores. The subscription opens on April 11, 2023, and will close on or before April 25, 2023. The minimum application is for 10 NCDs (i.e., Rs. 10,000) and multiples of 1 NCD (i.e., Rs. 1,000) thereafter. After allotment, the NCDs will be listed on BSE. The company will spend Rs 1.60 crores on the entire issue proceeds.

The net proceeds will be used for onward lending (at least 40%), repayment of interest and principal of existing loans (up to 35%), and general corpus fund needs (maximum up to 25%). SMC Capitals Ltd. is the sole lead manager for the issue, KFin Technologies Pvt. Ltd. serves as the registrar, and Vistra ITCL (India) Ltd. acts as the debenture trustee.

The NCDs have tenures of 15, 24, 30, 36, 39, 48, 54, and 88 months, offering coupon rates ranging from 8.75% to 9.50%, depending on the investor’s selection. Interest payments will be made monthly or on a cumulative basis, as per the investor’s preference.

Financial Performance (Amount in Rs Crore)

Important Dates

Coupon Rates

NCD Rating

The current issue has been rated IND A-/Stable by India Ratings & Research Pvt. Ltd. This rating suggests that instruments with this rating possess an adequate level of safety concerning the timely

payment of financial obligations and carry a low credit risk. However, this rating is not a recommendation to sell, buy or hold securities, and investors should make their own decisions. The rating provided by the rating agency can be withdrawn, suspended, or revised at any time based on new information, among other factors, and should be assessed accordingly.

Company Promoters

The promoters of the company are Mathew K. Cherian, Laila Mathew, and Jilu Saju Varghese.

The Objective of the Issue

The company intends to use the funds raised for the following purposes: onward lending, repayment of interest and principal of existing debts, and general corporate purposes.

How to Apply

Wait for the NCD to open for subscription, then click on this link to apply for the Kosamattam Finance Limited with Bigul https://ncd.bonanzaonline.com/. 

How to Check Allotment Status

The registrar for Kosamattam Finance Limited is KFin Technologies Limited. To check your allotment status, please click on this link https://karisma.kfintech.com/

FAQs 

1. When is the Kosamattam Finance NCD April 2023 public issue scheduled? 

The Kosamattam Finance NCD April 2023 issue is set to open for subscription on April 11, 2023, and close on April 25, 2023. Please note that if the issue is fully subscribed (base + shelf) before the closing date, the public issue of NCD may close early. Allotment will be done on a First Come, First Serve Basis.

2. What is the timetable for the Kosamattam Finance NCD April 2023 issue? 

The key dates for the Kosamattam Finance Limited NCD IPO are as follows:

• Bid/Offer Opens On April 11, 2023
• Bid/Offer Closes On April 25, 2023

3. What is the pricing of the Kosamattam Finance NCD April 2023 issue? 

The price for the Kosamattam Finance NCD April 2023 issue is set at Rs 1000 per NCD.

4. What is the face value of the Kosamattam Finance NCD April 2023? 

The face value of each NCD in the issue is Rs 1000.

5. What is the interest payment frequency for the Kosamattam Finance NCD April 2023? 

The interest payment frequency for the Kosamattam Finance NCD April 2023 is monthly or Cumulative.

6. What is the minimum application size for investing in the Kosamattam Finance NCD April 2023 public issue? 

Investors must apply for a minimum of 10 NCDs and multiples of 1 NCD after that.

7. What is the closing time for the Kosamattam Finance NCD April 2023 subscription? 

The subscription for the Kosamattam Finance NCD April 2023 remains open on working days from 10:00 am to 5:00 pm until April 25, 2023. The bid may close earlier if fully subscribed.

8. What is the base issue size of the Kosamattam Finance NCD April 2023? 

The issue consists of a base issue and a shelf issue:

• NCD Base Issue Size: Rs 150 crore
• NCD Shelf Issue Size: Rs 300 crore Note that the shelf issue is an option to retain oversubscription up to the shelf issue size over and above the base issue.

9. Can NRIs apply for the Kosamattam Finance Limited NCD IPO? 

No, NRIs are not eligible to apply for this issue.

10. Who is ineligible to invest in the Kosamattam Finance Limited issue? 

Individuals who are not eligible to invest include:

• Minors without a guardian name
• Foreign nationals
• A person resident outside India
• Foreign Portfolio Investors
• Foreign Venture Capital Investors
• Qualified Foreign Investors
• Overseas Corporate Bodies
• Persons ineligible to contract under applicable statutory/regulatory requirements

11. On which stock exchange are the Kosamattam Finance Limited NCDs proposed to be listed? 

The NCDs are proposed to be listed on the BSE.

12. What is the basis of allotment for the Kosamattam Finance NCD April 2023 issue? How will the allocation occur in case of oversubscriptions? 

Applicants will be allocated NCDs on a First Come, First Serve Basis.