Edelweiss Financial Services Limited (EFSL) has announced the opening of a public issue of Secured Redeemable Non-Convertible Debentures (NCDs) worth up to Rs 2,000 million. The issue includes a base issue size of Rs 1,000 million with a green shoe option of an additional Rs 1,000 million.
The NCDs, with a face value of Rs 1,000 each, are being offered in twelve flavors, with tenures ranging from 24 to 120 months. The debentures carry fixed coupons with annual, monthly, and cumulative interest options, providing effective annual yields between 9.00% and 10.46%.
Non-Convertible Debenture (NCD) are an alternative to bank deposits, and can be offered by any company, not just banks or financial services firms. For retail investors, NCDs offer fixed and higher returns compared to bank deposits and are usually safer than stock investments. However, they are associated with credit risk tied to the issuer's ratings.
This issue has been rated "CRISIL A+/Stable" by CRISIL Ratings Limited, indicating an upper-middle position in the rating scale.
At least 75% of the funds raised will be used for repayment or prepayment of existing borrowings, while the remaining amount, not exceeding 25%, will be utilized for general corporate purposes in compliance with SEBI regulations, Edelweiss said. The NCDs will be listed on the BSE Limited to provide liquidity to investors.
The issue is set to open on April 8, 2024, and close on April 23, 2024. Trust Investment Advisors Private Limited and Nuvama Wealth Management Limited are the Lead Managers for the issue. Allotment will be made on the basis of the date of application upload into BSE's electronic book, with proportionate allocation in case of oversubscription.
EFSL, established in 1995, has diversified its businesses to include credit, asset management, asset reconstruction, insurance, and wealth management.
The company has expanded its retail footprint to approximately 6.7 million customers. As of December 31, 2023, EFSL had a network of 247 offices across India and internationally, and employed 6,092 people.