Aditya Birla Finance Limited (ABFL) has made a significant financial announcement, revealing plans to raise Rs 2,000 crore through its maiden public issue of non-convertible debentures (NCDs). This strategic move was confirmed through a company filing, where it was specified that ABFL intends to issue NCDs with a base amount of up to Rs 1,000 crore, while retaining the option to accommodate oversubscription of an additional Rs 1,000 crore, resulting in a combined issuance of up to Rs 2,000 crore.
ABFL, a subsidiary of Aditya Birla Capital Limited, outlined the primary utilization of the net proceeds from this issue. A minimum of 75 per cent of the funds raised will be channelled towards onward lending activities, financing, and the repayment of interest and principal on existing borrowings. The remaining 25 per cent of the net proceeds will be allocated for general corporate purposes.
The allotment process for these NCDs will be executed on a first-come, first-serve basis. ABFL is providing investors with flexible tenor options, spanning three, five, or ten years, and further choices in terms of interest payment frequency, which include 'monthly,' 'annual,' or 'cumulative' options. The coupon rates associated with these NCDs will vary, ranging from 8 per cent per annum to 8.10 per cent per annum for annual interest payment options. These rates correspond to effective yields ranging from 7.99 per cent per annum to 8.09 per cent per annum across various series.
For the management of this substantial NCD issue, ABFL has enlisted the services of Trust Investment Advisors Private Limited, AK Capital Services Limited, JM Financial Limited, and Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited), all serving as lead managers. The subscription period for the NCDs is scheduled to commence on September 27, with the closing date set for October 12, 20XX. Importantly, ABFL retains the option for early closure should market conditions warrant such a decision.
To underscore the creditworthiness and reliability of the NCDs being offered, ABFL pointed out that they have secured high credit ratings. Specifically, the NCDs have been rated as IND AAA Outlook Stable by India Ratings & Research Private Limited, and ICRA AAA (Stable) by ICRA Limited, both esteemed credit rating agencies.
This move by ABFL to raise capital through NCDs marks a significant step in expanding its financial capabilities and strengthening its position in the market. As the subscription period approaches, investors and financial institutions alike will be closely monitoring this development to assess the potential impact on the company's financial outlook and strategic growth initiatives.
