by Sachin Murdeshwar

Mumbai  : Manappuram Home Finance Limited (the “Company”) is focussed on providing affordable housing finance for the Economically Weaker Section (“EWS”), Low Income Group (“LIG”) and Mid Income Group (“MIG”) segment primarily in Tier II and Tier III cities and towns in India. The Company is a wholly owned subsidiary of Manappuram Finance Limited. The Company proposes to open its issue of Secured, Redeemable, Non Convertible Debentures of face value of ₹1,000 each (“NCDs”) for an amount aggregating up to ₹20,000 lakhs (“Issue”). The Issue consists of base issue size of ₹10,000 lakhs with an option to retain oversubscription of up to ₹10,000 lakhs. According to the Company, these are secured NCDs which are available in 7 options, and effective yield rates vary between 10.00% to 10.75%. The minimum application is of 10 NCDs amounting to ₹10,000 collectively across all Options of NCDs and in multiples of one NCD of face value of ₹1,000 each after the minimum application. The issue is scheduled to be open on September 30, 2019 and scheduled to be closed on October 29, 2019 with an option of early closure or extension as decided by the Board of Directors of the Company (“Board”) or the Debenture Committee of the Company as the case may be subject to receipt of necessary approvals.

 

These NCD’s are rated as ‘CARE AA-; Stable’ by CARE Ratings. The rating of ‘CARE AA-; Stable’ by CARE Ratings indicates that instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations and further they carry very low credit risk.

 

Moreover, recently the credit rating of the Company’s long term bank loan facilities has been upgraded by CRISIL from A+/Positive to CRISIL AA-/Stable.

 

Issue Structure:

Option I : Fixed Interest, Frequency: Monthly, Tenor: 36 months, Coupon Rate : 9.75 %, Effective Yield : 10.20%.

 

Option II : Fixed Interest, Frequency : Annually, Tenor : 36 months, Coupon Rate : 10.00%, Effective Yield : 10.00%.

 

Option III : Fixed Interest, Frequency : Cumulative, Tenor: 36 months,  Effective Yield : 10.00%, Redemption Amount : `1,331.

 

Option IV : Fixed Interest, Frequency: Monthly, Tenor: 60 months, Coupon Rate : 10.25 %, Effective Yield : 10.75%.

 

Option V : Fixed Interest, Frequency : Annually, Tenor : 60 months, Coupon Rate : 10.65%, Effective Yield : 10.65%.

 

Option VI : Fixed Interest, Frequency : Cumulative, Tenor: 60 months, Effective Yield : 10.65%, Redemption Amount :  `1,659.

 

Option VII : Fixed Interest, Frequency: Cumulative, Tenor : 2,500 Days, Effective Yield : 10.65%, Redemption Amount : ` 2,000.

 

The objects of the Issue is to utilise at least 75% of the net proceeds of the Issue for the purpose of onward lending, financing, and for repayment /prepayment of interest and principal of existing borrowings of the Company and a maximum of up to 25% towards general corporate purposes.

 

The NCDs offered through the Prospectus dated September 19, 2019 are proposed to be listed on BSE Limited (“BSE”). The Lead Manager to the Issue is Vivro Financial Services Private Limited.

 

The Company is focused on providing affordable housing finance for the EWS, LIG and MIG segment primarily in Tier II and Tier III cities and towns in India. The Company offers two basic products namely Home Loan and Loan Against Property (“LAP”). The Company provides secured finance primarily to individual customers with focus on self-employed (professional and non-professional) and salaried (informal segment) for purchase, self-construction, improvement and extension of homes, new and resalable flats, balance transfer of existing loans, commercial properties (purchase/ LAP) and composite loan (land and construction). The customer base of the Company consists of 6,184 customers (based on number of loan accounts) and it’s the total assets under management was ₹51,875.81 lakhs, as on March 31, 2019.

 

The Company’s Promoter, Manappuram Finance Limited is a systemically important non-deposit taking NBFC primarily focused on providing loans against the pledge of household and/or used gold jewellery and providing short term personal and business gold loan to retail customers