IndoStar Capital Finance unveils up to Rs 30,000 lakh public issue of high-yield NCDs

IndoStar Capital Finance Limited, a prominent non-banking financial company (NBFC) in India, has announced a significant public issue of Secured Redeemable Non-Convertible Debentures (NCDs), aiming to raise up to ₹30,000 Lakh. This major financial move is set to open on September 6, 2024, and will close on September 19, 2024, though there is an option for early closure or extension depending on market conditions.

The NCDs, each with a face value of ₹1,000, will be offered in five series, featuring fixed coupon rates ranging from 10.30% per annum to 10.70% per annum. Investors can choose from three tenures: 24 months, 36 months, and 60 months. The debentures come with flexible interest payment options, including annual, quarterly, and cumulative, allowing investors to select the frequency that best suits their financial needs.

The public issue is structured with a base size of ₹15,000 Lakh, and an additional Green Shoe Option of ₹15,000 Lakh, making the total potential issue size ₹30,000 Lakh. This structure is designed to accommodate high investor demand and provide a substantial investment opportunity. The allotment process will be managed based on the electronic book uploaded to BSE Limited, with a proportionate allotment system in place in case of oversubscription.

Proceeds from the issue will be utilized primarily for onward lending activities, with at least 90% of the net funds directed towards supporting the company’s core operations, which include vehicle financing and home finance solutions. The remaining 10% will be allocated for general corporate purposes, offering the company added financial flexibility.

The NCDs have been assigned a credit rating of “CARE AA-/Stable” by CARE Ratings, indicating a high degree of safety and very low credit risk. This rating enhances the attractiveness of the debentures for risk-averse investors seeking stable returns.

Nuvama Wealth Management Limited has been appointed as the Lead Manager for this issue. The NCDs will be listed on BSE Limited, providing investors with a transparent and liquid trading platform. The minimum application amount is set at ₹10,000, with subsequent investments allowed in multiples of ₹1,000, making the debentures accessible to a wide range of investors.

IndoStar Capital Finance Limited is a well-established NBFC registered with the Reserve Bank of India and classified as a middle-layered NBFC. The company, professionally managed and institutionally owned, offers a diverse range of financial services, including new and used vehicle financing, home loans, SME loans, and structured term financing for corporates. The major stakeholders include BCP V Multiple Holdings Pte Ltd (Brookfield) and IndoStar Capital (Mauritius).