Motilal Oswal Financial Services launches Rs 1,000cr NCD public issue

Motilal Oswal Financial Services Limited (MOFSL) has officially announced the launch of its public issue of Secured Redeemable Non-Convertible Debentures (NCDs), with each debenture having a face value of ₹1,000. The base issue size is set at ₹500 crore, with an additional green shoe option that could take the total issue size up to ₹1,000 crore. This initiative marks a significant move in the company’s financial strategy, aimed at enhancing its capital structure and funding its future growth needs effectively.

The issue, opening on April 23, 2024, and closing on May 7, 2024, features eight series of NCDs. These debentures offer fixed coupon rates and are available in varying tenures of 24, 36, 60, and 120 months. Investors can choose from annual, monthly, and at-maturity interest payment options, with effective annual yields ranging from 8.85% to 9.70%. This range provides an attractive opportunity for investors seeking to balance risk with a decent return on investment.

At least 75% of the funds raised will be allocated towards meeting working capital requirements and repaying existing liabilities. The remaining 25% could be used for general corporate purposes, adhering to the stringent guidelines set by the Securities and Exchange Board of India (SEBI) under the Non-Convertible Securities (NCS) Regulations of 2021.

The NCDs have received a “CRISIL AA/Stable” rating from CRISIL Ratings and “IND AA/Stable” from India Ratings. These ratings indicate a high degree of safety and very low credit risk, assuring investors of the timeliness in financial obligations fulfillment.

The issue is managed by Trust Investment Advisors Private Limited, Nuvama Wealth Management Limited, and Motilal Oswal Investment Advisors Limited, the latter being an associate of the issuer as per SEBI regulations. This team of experienced lead managers ensures a robust marketing strategy, adhering to all regulatory frameworks. Furthermore, the NCDs are set to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), with BSE designated as the primary exchange for this issue.

The launch of this NCD by Motilal Oswal Financial Services Limited represents a prudent financial instrument for investors seeking secured and stable returns. The structured issue coupled with strong regulatory adherence and favorable ratings positions this offering as a compelling option for those diversifying their investment portfolios in secure debt instruments.