Sep 4, 2012

Shriram City Union Finance Limited - Public Issue of Secured Non-Convertible Debentures - September 2012

Shriram City Union Finance Limited - Public Issue of  Secured Non-convertible Debentures (“NCD”) aggregating up to R 250 Crs with an option to retain over-subscription of up to Rs.250 Crs.

Shriram City Union Finance Limited is a part of Shriram Group of Companies and was incorporated in 1986. The Group has a strong presence in financial services viz., commercial vehicle financing, consumer finance, life and general insurance, stock broking, chit funds and distribution of financial products such as life and general insurance products and mutual fund products, as well as a growing presence in other businesses such as property development, engineering projects and information technology.

The Company is a deposit-accepting NBFC registered with RBI, offering (i) financing for two wheelers, appliances and other commercial goods, (“Product Finance”), (ii) preowned and new vehicle loans, (iii) personal loans, (iv) loans against gold including small enterprise segment loans collateralized by gold, and (v) loans to the small enterprise finance segment. It is the largest small enterprise finance company in India, with a dominant share of 95% in the small loan segment (loans of Rs 1 lac - Rs10 lacs). It also leads the total Indian micro, small and medium enterprises market with 53% share. It has a track record of more than 25 years in the financial services sector in India, and has focused on the retail financing segment since 2005.
The Company intends to strategically expand its operations by establishing additional business outlets. The company proposes to target establishing operations through new business outlets in cities and towns where it historically had relatively limited operations, such as in eastern and northern parts of India, and to further consolidate its position and operations in western and southern parts of India. The Company’s focus
would be to typically target Tier II and Tier III cities, where it believes that demand for the Company’s products will grow steadily in the near future.

The stringent credit policies and relationship based model has helped the company maintain relatively low NPA levels. The Gross NPAs and Net NPAs as a percentage of Total Loan Assets stood at 1.55 % and 0.38 % respectively as at March 31, 2012.

Issue Programme* : Issue Opening Date – September 12, 2012, Issue Closing Date – September 26, 2012


Credit Rating : CRISIL – ‘AA-/Stable’ and CARE – CARE AA
The above ratings are for an amount of up to Rs 500 crs


Security for the NCD’s: The principal amount of the NCDs to be issued in the terms of this Prospectus together with all interest due on the NCDs, as well as all costs, charges, all fees, remuneration of Debenture Trustee and expenses payable in respect thereof shall be secured by way of first charge in favour of the Debenture Trustee on identified immovable property and specified future receivables of the Company as may be decided mutually by the Company and the Debenture Trustee.

Specific Terms of the issue:
Terms of Issue
Series
I
II
III
IV
Frequency of
Interest Payment
Annual
Annual
N/A
N/A
Minimum
Application
Rs.10,000/- (10 NCDs) (for all options of NCDs, namely Series I, Series II, Series III
and Series IV either taken individually or collectively)
In Multiples of
Rs.1,000 (1 NCD)
Face Value of NCDs
(Rs. / NCD)
Rs.1,000
Issue Price
Rs.1,000
Mode of Interest
Payment
Through various options available
Coupon (%) for
NCD Holders
10.60% per
annum
10.75% per
annum
N/A
N/A
Additional
Incentive on
Coupon (% per
annum) on any
record date
For Individual
NCD holders –
0.90%
For Individual
NCD holders -1%
N/A
N/A
For non-individual
NCD holders - Nil
For non-individual
NCD holders –Nil
N/A
N/A
Effective Yield (per 11.75%
annum)
For Individual
NCD holders –
11.50%
For Individual
NCD holders –
11.75%
For Individual
NCD holders –
11.50%
For Individual
NCD holders –
per 11.75%
For non-individual
NCD holders –
10.60%
For non-individual
NCD holders –
10.75%
For non-individual
NCD holders –
10.60%
For non-individual
NCD holders –
10.75%
Put and call option
None
Tenor
36 Months
60 Months
36 Months
60 Months
Redemption Date
36 months from
the Deemed Date
of Allotment*
60 months from
the Deemed Date
of Allotment
36 months from
the Deemed Date
of Allotment*
60 months from
the Deemed Date
of Allotment
Redemption
Amount (Rs./NCD)
Repayment of the
Face Value plus
any interest that
may have accrued
plus Additional
Incentive as may
be applicable on
the Redemption
Date
Repayment of the
Face Value plus
any interest that
may have accrued
plus Additional
Incentive as may
be applicable on
the Redemption
Date
For Individual
NCD holders -
Rs 1,386.2 per
NCD
For Individual
NCD holders -
Rs1,743 per NCD


For non-individual
NCD holders –
Rs 1,352.90 per
NCD
For non-individual
NCD holders –
Rs 1,666.65 per
NCD
Credit Rating
Crisil –‘AA-/Stable’
Crisil –‘AA-/Stable’
Crisil –‘AA-/Stable’
Crisil –‘AA-/Stable’
Care – ‘AA’
Care – ‘AA’
Care – ‘AA’
Care – ‘AA’
For an amount of upto Rs 500 Crs
For an amount of upto Rs 500 Crs
For an amount of upto Rs 500 Crs
For an amount of upto Rs 500 Crs

Issuance/Trading : NCD’s are proposed to be listed on the National Stock Exchange and the Bombay Stock Exchange and are issued and traded in demat form only. Deemed date of allotment shall be the date of issue of the letter of allotment / regret.

Taxation : Interest on NCD received by Debenture Holders would be subject to tax at the normal rates of tax in accordance with and subject to the provisions of the I.T. Act. No income tax is deductible at source as per the provisions of section 193 of the Income Tax Act (IT Act) on interest on listed NCDs held in the dematerialized form.
As per section 2(29A) of the I.T Act, read with section 2(42A) of the Act, a listed debenture is treated as a long term capital asset if the same is held for more than 12 months immediately preceding the date of its transfer and treated as short term gain if held for less than 12 months and short term gain is taxable at normal slab rate.

For more details get in touch with us, just fill up the Enquiry form Click Here or To apply Kindly indicate your interest on by Calling us at 0-9818269396, or email at info@safeinvestindia.com. We shall send you the Soft / Hard copy of application forms.

Contact Us

Email: info@safeinvestindia.com | Phone: 0-981-826-9396 | Fill Inquiry Form Click Here

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