26-Oct-2023
2 mins read
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NCD Detail
Sakthi Finance has introduced secured NCD bonds that allow investors to double their investment in 85 months. These bonds will be available for subscription from April 17th to April 28th, 2023. As a finance company focusing on financing pre-owned commercial vehicles, Sakthi Finance offers NCDs with interest rates of up to 10.25% and yields of up to 14.3%. These NCDs have a tenure ranging from 24 to 85 months, with interest payments made either monthly or on maturity, depending on the chosen NCD option.
About Company
Sakthi Finance Limited (SFL)is a diversified company primarily financing pre-owned commercial vehicles, infrastructure construction equipment, multi-utility vehicles, and other machinery. Its target customers are Small/Medium Road Transport Operators (SRTOs/MRTOs) from rural/semi-urban areas who seek flexible and speedy lending services. The company operates in Southern India through its network of 51 branches and customer service points. It also generates power from 17 windmills with a total capacity of 5,150 kW in Tamil Nadu and Gujarat. As of December 31, 2022, Sakthi Finance’s Asset Under Management (AUM) was Rs 1160.22 cr. with an AUM growth rate of 1.51%. Its income from the hire purchase business constitutes about 95.61% of its operating income for FY 2022. The company had 505 employees as of December 31, 2022.
Issue Details
Sakthi Finance Limited is set to launch its 6th debt issue of secured, redeemable non-convertible debentures. The issue is opening for subscription on April 17, 2023. It closes on or before April 28, 2023, with a base size of Rs 100 crore and a green shoe option of retaining oversubscription up to Rs 100 crore, making the overall size of the debt issue Rs 200 crore. The NCDs will be listed on BSE after allotment. The debt offer has tenors of 24 to 85 months and offers a coupon rate ranging from 9.00% to 10.25%, with a minimum investment of Rs 10,000 and multiples of Rs 1,000 afterwards. The funds raised will be used for onward lending, financing, repayment/prepayment of existing borrowings and general corporate purposes. Bonanza Portfolio Ltd manages the debt offering, with Link Intime India Pvt Ltd as the registrar and Catalyst Trusteeship Ltd as the debenture trustee. There is no reservation for any portion of this offer.
Financial Performance (In Crore)
| Period Ended | Total Assets | Total Revenue | Profit After Tax | Net Worth |
| 31-Mar-20 | ₹ 1,220.01 | ₹ 170.23 | ₹ 11.18 | ₹ 158.29 |
| 31-Mar-21 | ₹ 1,237.75 | ₹ 171.34 | ₹ 9.26 | ₹ 164.89 |
| 31-Mar-22 | ₹ 1,269.43 | ₹ 181.35 | ₹ 9.52 | ₹ 170.95 |
| 30-Sep-22 | ₹ 1,293.99 | ₹ 93.85 | ₹ 5.88 | ₹ 173.70 |
Important Dates
| Issue Open | Apr 17, 2023 – Apr 28, 2023 |
| Security Name | Sakthi Finance Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | Rs 100.00 Crores |
| Issue Size (Shelf) | Rs 200.00 Crores |
| Issue Price | Rs 1000 per NCD |
| Face Value | Rs 1000 each NCD |
| Minimum Lot size | 10 NCD |
| Market Lot | 1 NCD |
| Listing At | BSE |
| Credit Rating | ICRA BBB (Stable) |
| Tenor | 24, 36, 48, 60, and 85 months |
| Series | Series I to IX |
| Payment Frequency | Monthly and Cumulative |
| Basis of Allotment | First Come First Serve Basis |
| Debenture Trustees | CATALYST TRUSTEESHIP LIMITED |
NCD Rating
The upcoming debt issue has been assigned a rating of ICRA BBB/Stable by ICRA.
Company Promoters
The promoters of the company are Dr. M Manickam and M Balasubramaniam.
The Objective of the Issue
The primary utilisation of the proceeds from the debt issue will be for onward lending and financing, as well as for repayment or prepayment of the principal and interest of existing borrowings. Additionally, a portion of the funds raised will be allocated for general corporate purposes. It is crucial to note that the company intends to use at least 75% of the net proceeds for the aforementioned purposes, with the remaining amount reserved for general corporate requirements. These objectives indicate that the company is primarily focused on expanding its lending portfolio and managing its existing liabilities while also maintaining the overall health and growth of the organisation.
How to Apply
Wait for the NCD to open for subscription.
FAQs
- What are Sakthi Finance NCD bonds?
Sakthi Finance NCD bonds are secured, redeemable non-convertible debentures offered by Sakthi Finance Limited. These bonds are designed to double investors’ money in 85 months and are available for subscription from April 17th to April 28th, 2023.
- What is the interest rate on Sakthi Finance NCDs?
Sakthi Finance NCDs offer interest rates of up to 10.25% and yields of up to 14.3%. The interest payment options include monthly and cumulative.
- What is the tenure of Sakthi Finance NCDs?
Sakthi Finance NCDs have tenors of 24, 36, 48, 60, and 85 months.
- What is the minimum investment in Sakthi Finance NCDs?
The minimum investment in Sakthi Finance NCDs is Rs 10,000 (i.e., 10 NCDs), multiples of Rs 1,000 afterward.
- How can I apply for Sakthi Finance NCDs?
To apply for Sakthi Finance NCDs, wait for the NCDs to open for subscription.
- What is the credit rating assigned to Sakthi Finance NCDs?
ICRA has assigned a rating of ICRA BBB/Stable to the upcoming debt issue.
- Who are the promoters of Sakthi Finance?
The promoters of Sakthi Finance are Dr M Manickam and M Balasubramaniam.
- What is the primary utilisation of the proceeds from Sakthi Finance NCDs?
The proceeds from Sakthi Finance NCDs are primarily used for onward lending and financing, repayment or prepayment of the principal and interest of existing borrowings, and general corporate purposes.