Shriram Transport To Raise Rs 500 crore Through NCD

Through this NCD issue, Shriram Transport plans to raise an amount up to Rs 500 crore, with an option to retain over-subscription upto the shelf limit of Rs 3000 crore. The issue opens on July 2, 2014 and will close on July 22, 2014, with an option of early closure, subject to the base issue size being fully subscribed prior to such early closure and/or extension. The NCDs proposed to be issued under this issue have been rated ‘CRISIL AA/Stable’ by CRISIL, ‘CARE AA+’ by CARE and ‘IND AA+’ by India Ratings for an amount of upto Rs 3000 crore. These ratings indicate high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk.

The funds raised through this issue will be used for the company’s various financing activities including lending and investments, to repay the existing loans and the business operations including their capital expenditure and working capital requirements.

 The options for investment tenors are three, five and seven years, with yields of 11% p.a, 11.25% p.a, and 11.50%p.a respectively for individual investors. Senior citizens are entitled to an additional yield of 0.25% p.a across all tenures.

These NCDs, bearing a fixed rate of interest, are being offered under eight different series:

The coupon rate for individuals for Series I, Series II and Series III having tenure of 36 months, 60 months and 84 months respectively, shall be 11% p.a (including additional incentive of 1.15%), 11.25% p.a (including additional incentive of 1.25%) and 11.50% p.a (including additional incentive of 1.35%) respectively, payable annually.

Series IV and V are monthly options, available only to individuals applying for allotment of NCDs in demat form only. The coupon rates are 10.71% p.a. for Series IV (5years) and 10.94% p.a. for Series V (7 years).

Series VI, VII and VIII are cumulative options, where face value and interest accrued are paid at the end of the tenure. The effective yields for the individuals are 11% p.a. for Series VI (3 years), 11.25% p.a. for Series VII (5 years) and 11.50% p.a. for Series VIII (7 years).

The NCDs are proposed to be listed on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

JM Financial Institutional Securities, A.K. Capital Services, Edelweiss Financial Services and ICICI Securities are the lead managers to the issue. IDBI Trusteeship Services is the debenture trustee to the issue, while integrated Enterprises (India) is the registrar to the issue.