L&T Finance, promoted by engineering and construction major Larsen & Toubro (L&T), plans to raise Rs 1,000-crore through its first-ever public offer of non convertible debentures .
The company said today the issue will remain open between August 18 and September 4.
The company is offering 50-lakh Secured Redeemable Non-Convertible Debentures (NCDs) of the face-value of Rs 1,000 each aggregating to Rs 500 crore with an option to retain over-subscription up to Rs 500-crore aggregating to a total of Rs 1,000-crore.
The issue offers various investment options and maturity periods range from five to ten years and the annualised yield for ten year debenture work out to 10.50%.
"The funds raised through the NCD issue will be used by the company for its various financing activities including lending and investments and for its business operations, including capital expenditure and working capital requirements," L&T Finance's chief financial officer (CFO), YM Deosthalee, said here today.
Under its semi-annual interest payment the redemption date is 120 months. The coupon rate is 10.24 per cent per annum and the annualized yield is 10.50 per cent.
The NCDs would be listed on the National Stock Exchange (NSE).
The company's revenues stood at Rs 830.28-crore for the year ending March 31, 2009.
The asset base financial service business of L&T is estimated at Rs 8,500-crore, which includes an asset base of Rs 5,500-crore of L&T Finance and Rs 3,000-crore of L&T Infrastructure Finance, which is engaged in project financing, Deosthalee said.
L&T Finance should achieve minimum of 20-25 per cent componding growth, Deosthalee said.
The NCDs have been rated CARE AA+ by CARE and LAA+ by ICRA.
The company which began by financing small and medium enterprises has now evolved into a multi-product asset backed finance company with a diversified corporate and retail portfolio.
"We are in the business of construction equipment, agriculture tractor and other equipment, micro finance and other corporate products," Deosthalee said.
"The company has been growing at 30-35% over the last five years and there is a lot of potential in all these segments. The money will be used for funding the growth," Deosthalee said.
The company has an option of raising funds through an equity issue at a later stage, he added. The company is offering four investment options to its investors.
Under its quarterly interest payment option the coupon rate is 9.51% per annum and the annualized yield is 9.85%. The maturity period is 60 months.
Under the semi-annual interest payment option maturity period is 60 months and the coupon rate is 9.62% per annum and the annualized yield is 9.85%.
Its cumulative interest payment option offers a coupon rate of 9.95% compounded annually and the annualized yield of 9.95%. The maturity period is 88-months from the deemed date of allotment.
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