L&T Finance Limited, a wholly owned subsidiary of L&T Finance Holdings Limited, has announced the early closure of its public issue of secured NCDs that are rated Triple A (AAA). According to the company, the issue was oversubscribed on day one of opening of Tranche 2 Issue on April 8, 2019. The company said it has raised a total of Rs 3,238.48 crore worth of subscriptions which is 6.48 times of the base issue size (Rs 500 crore).
All categories of the base issue size were over-subscribed i.e. Institutional, Non-Institutional, HNIs and Retail investors’ participation in the Tranche 2 Issue led to an oversubscription of 5.33 times, 2.23 times, 8.86 times and 5.82 times in respective categories as on the early closure date of April 9, 2019, the company said citing stock exchange bid data as on 5 pm.
The second tranche of the issue included a base issue size for an amount of Rs 500 crore with an option to retain oversubscription up to Rs 500 crore aggregating up to Rs 1,000 crore. These NCDs have been rated [ICRA] AAA (stable), CARE AAA / Stable and IND AAA / Stable.
L&T Finance’s ‘AAA’ instruments are offering you coupon i.e. interest rate, ranging from 8.66% per annum (for 5 years tenure/monthly interest payment) to 9.05% (for 8 years/annual interest payment).
RupeeIQ had recommended that if investors had Rs 1 lakh, they could consider investing 60% of it in L&T Finance NCDs while putting 20% each in Muthoot and Magma offerings, which also opened on April 8.
The NCD issue for L&T Finance is a step in the company’s overall strategic intent of building a retail liability franchise. It is expected that the funds raised will further add to the diversity of the borrowing mix.
Allotment in the public issue of debt securities would be made on the basis of date of upload of each application into the electronic book of the stock exchange. However, on the date of oversubscription, the allotments should be made to the applicants on a proportionate basis.
Do note the first tranche of the NCD was also oversubscribed on day one of issue opening on March 6, 2019. The company, then, had raised a total of Rs. 2,228.06 crore worth of subscriptions which is 4.45 times of the base issue size (Rs. 500 crore). HNIs and Retail investors’ participation in the Tranche 1 Issue led to an oversubscription of 6.64 times and 6.68 times in respective categories as on the early closure date of March 7, 2019
According to the company, L&T Finance’s operations are spread throughout India and it has 223 branches in 218 cities across 21 states and 3 union territories, as of December 31, 2018. In addition, for its micro loans business, it has 1,181 meeting centres covering 274 districts across 14 states in India, as of December 31, 2018. The company has 19,649 employees as of December 31, 2018.