SREI Infra

By Research Desk
about 7 years ago
SREI Infra

Introduction:

SREI Infrastructure Finance, 23year old listed NBFC, is entering the debt capital market with a public issue of secured redeemable non-convertible debentures (NCD) of face value Rs. 1,000 each to raise Rs. 75 crore with an option to retain another Rs 75 crore, taking the total fund raising to Rs. 150 crore.

 

Issue Details:

The first-cum-first serve issue opens on 20th September and closes on 25th October 2012, with an option in company’s hands to either close the issue earlier or extend the closing. Minimum application amount is Rs. 1,00,000 for series I and II while it is Rs 10,000 for series III and IV, and in multiples of Rs, 1,000 thereof across all series.

 

Rating: ‘AA’ by CARE and BRICKWORK indicating high degree of safety for timely servicing of financial obligations

 

Listing: To be listed on BSE with one NCD comprising a trading lot. NCD would be issued both in demat and physical (for individual investors) form.

 

What’s on offer: The 7 year NCD issue has 4 investment options as under:

 

Particulars

Series I

Series II

Series III

Series IV

Frequency of interest payment

Monthly

Quarterly

Annual

Cumulative

Investors who can apply

Individual/HUF

Individual/HUF

All

All

Tenure

7 years

7 years

7 years

7 years

Coupon Rate (% pa)

 

 

 

 

  • Individual Investor

NA

NA

10.30%

NA

  • Non-Individual Investor

9.84%

9.92%

10.25%

NA

Effective Yield (% pa)

 

 

 

 

  • Individual Investor

NA

NA

10.30%

10.25%

  • Non-Individual Investor

10.30%

10.30%

10.25%

10.41%

Put Option

After 5 years

After 5 years

After 5 years only for individuals

After 5 years only for individuals

Redemption Amount (per NCD)

 

 

 

 

  • Individual Investor

Face Value + Accrued Interest

Face Value + Accrued Interest

Face Value + Accrued Interest

Rs. 2,000 (Rs.1,633 on put)

  • Non-Individual Investor

Rs. 1,980

 

Company Background:

SREI Infrastructure Finance provides financial products and services to its about 30,000 customers engaged in infrastructure development and construction. For FY12, consolidated total income stood at Rs. 2,446 crore with PAT of Rs. 123 crore. For Q1FY13, consolidated total income was Rs. 756 crore and PAT Rs. 22 crore. As of 30th June 2012, company had networth of Rs. 3,200 crore, on equity of Rs. 503 crore, leading to BVPS of Rs. 64. Its asset quality indicates gross NPAs of Rs. 110 crore and net NPAs of Rs. 99 crore, translating to net NPAs ratio of 0.78%.  

 

Rate of Return: Not very attractive vis-à-vis offer by other companies on their secured NCDs like Religare and Muthoot, which enjoy credit rating one notch above SREI Infra.

 

Recommendation:

The current NCD issue is not attractive as its effective yields are low, versus other existing options, currently underway. Only positive is that NCDs have a longer tenure of 7 years as against 5-6 years by other issuers. One can give this a miss!

 

 

Articles you may also like

Popular Comments

No comment posted for this article.