Hyderabad: ECL Finance Ltd (ECLF), the NBFC arm of Edelweiss Group, today announced the public issue of Secured Redeemable Non-Convertible Debentures (NCDs) of a face value of ₹1,000 each, amounting to ₹ 100 crores (“Base Issue”), with an option to retain over-subscription up to ₹ 400 crores aggregating to a total of ₹ 500 crores (“Tranche II Issue”).
The NCDs offer an effective yield (cumulative) of 9.90% p.a. for 24 months tenure, 10.20% p.a. for 39 months tenure, up to 10.40% p.a. for 60 months tenure and 10.41% for 120 months tenure (monthly option). The funds raised through this Tranche II Issue will be used for the purpose of onward lending and repayment of interest and principal of existing borrowings of the Company and for general corporate purpose.
Existing holders of NCD(s)/Bond(s) previously issued by ECL Finance Ltd and/or are equity shareholder(s) of the Promoter, Edelweiss Financial Services Limited (“EFSL”) as the case may be, on the Deemed Date of Allotment, shall be eligible for an additional incentive of 0.25% p.a.
CRISIL has rated the offering “AA- /Stable and CARE has rated it as AA- /Stable. These ratings indicate that the instruments are considered to have a high degree of safety for timely servicing of financial obligations and carry very low credit risk.
Axis Bank Limited and Edelweiss Financial Services Limited# are the lead managers for this NCD Issue. The Tranche II Issue opens on November 4th, 2019 and closes on November 22nd, 2019 with an option of early closure**. The NCDs will be listed on BSE Limited to provide liquidity to the investors.
Deepak Mittal, MD & CEO of ECL Finance, said, “Edelweiss has always been attentive to the financial appetite of our retail and corporate customers. The overwhelming response to our last NCD issue, reflected the investor appetite for high-quality issuances of financial instruments from Edelweiss. We continue focus on maintaining the quality of our loan book. While we have maintained a diversified business, we hope to further diversify our funding sources, with the public issue of NCDs.”
ECL Finance had announced the issue of Tranche I NCDs on May 10th 2019, with a base size of ₹ 150 crores and an option to retain over-subscription up to ₹ 150 crores aggregating to a total of ₹ 300 crores. The Tranche I issue witnessed a keen interest from retail investors with the retail bucket being oversubscribed by 2.36 times with total collection of ~ ₹ 212 crores.
Earlier this year, CDPQ Private Equity Asia Pte. Ltd., a wholly owned subsidiary of Caisse de dépôt et placement du Québec (“CDPQ”), one of North America’s largest pension fund managers, had invested ₹ 1040 crores in ECL Finance, with a total investment commitment of ₹ 1800 crores. The agreement enables ECL Finance to capitalize on opportunities in the credit market and confirm the capability of the Group to capture opportunities in the NBFC space.