Shriram Transport NCD – New

Shriram Transport Finance is planning to raise Rs 500 crore through retail non-convertible debentures (NCDs). The company plans to raise three-year secured NCDs at 9.75%. The company had earlier come out with such an NCD issue with good success.

The issue has as been rated AA/Stable’ by Crisil and ‘AA+’ by CARE.The bonds’ coupon rate ranges between 9% and 11%.The issue is open from May 17 , for the sale of NCDs up to Rs 250 crore with a greenshoe option up to Rs 250 crore.

Details of the issue:

The face value and the issue price is Rs.1000 and the minimum application is for 10 debentures Rs.10,000. There are two options 60 months and 84 months.
1. 60 months – coupon rate 9.75% paid annually and 10.5% paid semi annually.
2. 84 months – coupon rate 10.5% annually.

The term deposit rates are in the range of 6-7% for deposits of 1 year maturity. There is a premium of about 3% in the company’s NCD offer. Hence investors can invest in this issue, if they want higher returns than their present Bank Deposits.

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