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To secure a substantial capital infusion of Rs 2,000 crore, Aditya Birla Finance Ltd (ABFL) has embarked on its maiden venture into the non-convertible debentures (NCDs) market. ABFL has unveiled its intention to issue NCDs initially valued at Rs 1,000 crore, with an additional optiona to accommodate subscriptions of up to Rs 1,000 crore, potentially resulting in a total issuance of Rs 2,000 crore.
Utilization of Funds and Allocation
ABFL, an affiliate of Aditya Birla Capital Limited, has provided insights into its intended utilization of the funds raised through this significant financial move. The primary objective is the complete settlement of the company’s existing debts, including accrued interest. Of the total proceeds, a minimum of 75% will be directed towards extending new loans, supporting various financing activities, and retiring principal amounts. The remaining 25% will be earmarked for broader strategic business endeavors.
NCD Features and Investment Options
The allocation of NCDs will be conducted on a first-come, first-served basis. These NCDs offer flexible interest payment options, allowing investors to choose from monthly, annual, or cumulative payout structures. Furthermore, investors can select from multiple tenor choices, including three, five, or ten years. ABFL has specified a range of coupon rates for annual interest options, spanning from 8% to 8.10% annually. Depending on the specific NCD series chosen, effective yields will vary between 7.99% and 8.09% annually.
Lead Managers and Credit Ratings
ABFL has also disclosed the key players in managing this NCD offering, all of whom boast impeccable credit ratings. The primary managers for this venture include Trust Investment Advisors Private Limited, AK Capital Services Limited, JM Financial Limited, and Nuvama Wealth Management Ltd (formerly known as Edelweiss Securities Limited). The subscription window is set to open on September 27 and will close on October 12, with the possibility of an early conclusion.
It’s worth noting that both ICRA Ltd and India Ratings & Research Private Limited have assigned AAA (Stable) ratings to these NCDs, underscoring their exceptional creditworthiness and steadfast stability.
In conclusion, ABFL’s inaugural NCD offering presents a compelling opportunity for investors to participate in a promising financial venture while contributing to the company’s strategic financial objectives. The availability of diverse tenor and interest payment options enhances investment flexibility, and the backing of top-tier credit ratings underscores the reliability and credibility of this investment opportunity.
