Edelweiss Financial Services Ltd (EFSL) announced a public issue of secured non-convertible debentures (NCDs), which will offer an effective yield of up to 9.70%.
The company will look to raise ₹400 crore from this issue.
Subscription date
The NCD will open for subscription on 17 August and will closes on 6 September with an option to retain oversubscription up to ₹200 crore, aggregating up to ₹4,000 crore, and the NCDs will be listed on BSE Ltd.
The issue by Edelweiss Financial are secured, which means that in the event of liquidation, secured investors will get the first preference.
Funds Proceed
At least 75% of the funds raised through the issue will be used for the purpose of repayment or prepayment of interest and principal of existing borrowings of the company and the balance is proposed to be utilized for general corporate purposes.
Interest rate
There are eight series of NCDs carrying fixed coupon and having tenure of 36 months, 60 months and 120 months with annual, monthly and cumulative interest option.
The effective annual yield for NCDs will range between 9.09% and 9.70%.
Additional Incentives
An additional incentive of up to 0.20% per annum will be offered to investors who are also holders of NCDs, or bonds previously issued by Edelweiss Financial Services, or its group companies, such as ECL Finance Ltd, Edelweiss Housing Finance Ltd, Edelweiss Retail Finance Ltd and Edelweiss Finance & Investments Ltd.
Ranking of the issue
The NCDs proposed to be issued under the issue have been rated AA with a negative outlook by Acuite Ratings and Research and A+ with a negative outlook by ICRA Ltd.
As per experts, these ratings mean that the debentures carry low credit risk but are not as safe as AAA-rated instruments.
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