June 18, 2024
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Sakthi Finance NCD June 2024 Details & Guidance
NCD Issue Opens on 20 June 2024
NCD Issue Closes on 3 July 2024
# NCD Guidance is given at the bottom of the post
About the Company:
Sakthi Finance was incorporated in the year 1955 and has a track record of nearly four decadesin commercial vehicle financing segment. It is registered with RBI, under Section 45-IA of the Reserve Bank of India Act, 1934, with Department of Non-Banking Supervision, Chennai, as a NBFC-ML Investment and Credit Company–Deposit Taking (earlier termed as Asset Financing Company).
It is part of “Sakthi Group” of companies based in Coimbatore, South India, and a reputed and well-known Industrial conglomerate having major presence in sugar, industrial alcohol, automobile distribution, auto components, dairy, co-generation, wind energy and transportation.
It is an Investment and Credit company with primary focus on financing pre-owned commercial vehicles. It also provides finance for purchasing infrastructure construction equipment, multi-utility vehicles, cars, jeeps and other machinery. The finances provided are secured by lien on the assets financed. The target customers predominantly comprise Small / Medium Road Transport Operators (“SRTOs / MRTOs”)and primarily hail from rural / semi-urban area. The SRTOs / MRTOs looks for speedy disposal of finance at competitive rates. The company has identified this opportunity and positioned ourselves between the organized banking sector and local money lenders by offering the finance at competitive rate with flexible and speedy lending services to its customers. It operates primarily in the Southern region of the country mainly in the States of Tamil Nadu and Kerala through its branch network and customer service points.
The company has network of 54branches, located in Tamil Nadu, Kerala, Andhra Pradesh, Karnataka, Maharashtra, Haryana and Union Territory of Puducherry. In addition to finance business, it generates power from windmills and sell it to Tamil Nadu Electricity Board and Gujarat Urja Vikas Nigam Limited. At present, it has 17 windmills with an aggregate capacity of 5,150 kW located in the States of Tamil Nadu and Gujarat.
As on December 31, 2023, it has an Asset Under Management (“AUM”) of Rs. 1,22,168.76 lakh (net AUM after ECL provisions for impairment Allowance). Our AUM (net of ECL provisions) has grown from Rs. 1,09,353.73lakh as at March 31, 2021to Rs.1,14,500.10 lakh as of March 31, 2023, at a CAGR of 2.33%.
Get more details about the company @ http://www.sakthifinance.com
NCD Promoter:
Dr. M. Manickam and Shri. M. Balasubramaniam are the promoters of the company.
NCD Rating
The NCDs proposed to be issued by the company are rated [ICRA] BBB (Stable) by ICRA Limited (ICRA).
| Sakthi Finance NCD June 2024 Detail | |
| Issue Open | June 20, 2024 – July 3, 2024 |
| Security Name | Sakthi Finance Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | Rs 75.00 Crores |
| Issue Size (Oversubscription) | Rs 75.00 Crores |
| Overall Issue Size | Rs 150.00 Crores |
| Issue Price | Rs 1000 per NCD |
| Face Value | Rs 1000 each NCD |
| Minimum Lot size | 10 NCD |
| Market Lot | 1 NCD |
| Listing At | BSE |
| Credit Rating | [ICRA] BBB (Stable) by ICRA Limited. |
| Tenor | 24, 36, 60 and 85 months |
| Series | Series I to VII |
| Payment Frequency | Monthly and Cumulative |
| Basis of Allotment | First Come First Serve Basis |
| Debenture Trustee/s | Catalyst Trusteeship Limited |
| NCD Allocation Ratio | |
| Category | NCD’s Allocated |
| Institutional | 5% |
| Non-Institutional | 15% |
| HNI | 40% |
| Retail | 40% |
| Sakthi Finance Limited NCD Coupon Rates | |||||||
| Series 1 | Series 2 | Series 3 | Series 4 | Series 5 | Series 6 | Series 7 | |
| Frequency of Interest Payment | Monthly | Cumulative | Monthly | Cumulative | Monthly | Cumulative | Cumulative |
| Nature | Secured | Secured | Secured | Secured | Secured | Secured | Secured |
| Tenor | 24 Months | 24 Months | 36 Months | 36 Months | 60 Months | 60 Months | 85 Months |
| Coupon (% per Annum) | 9.00% | NA | 9.25% | NA | 10.25% | NA | NA |
| Effective Yield (% per Annum) | 9.00% | 9.31% | 9.25% | 9.58% | 10.25% | 10.65% | 10.38% |
| Amount on Maturity (In Rs.) | Rs 1,000.00 | Rs 1,194.83 | Rs 1,000.00 | Rs 1,315.66 | Rs 1,000.00 | Rs 1,658.72 | Rs 2,013.13 |
Sakthi Finance NCD June 2024 Details & Guidance
Objects of the Issue
The company intends to utilize the net proceeds from the issue towards the funding of the following objects:
For the purpose of onward lending, financing, and for repayment/prepayment of principal and interest of existing borrowings (including redemption of NCDs which would become due for redemption) of the Company.
For general corporate purposes.
.
Sakthi Finance NCD June 2024Financial Information (Restated)
| Company Financials | ||||
| Sakthi Finance Limited Financial Information (Restated) | ||||
| Period Ended | 31 December 2023 | 31 March 2023 | 31 March 2022 | 31 March 2021 |
| Assets | 1,381.26 | 1,300.58 | 1,269.43 | 1,240.43 |
| Revenue | 152.59 | 191.94 | 181.35 | 171.34 |
| Profit After Tax | 11.52 | 12.49 | 9.52 | 9.26 |
| Net Worth | 185.21 | 179.27 | 170.95 | 164.89 |
| Amount in Rs Crore | ||||
Address of the Company
Sakthi Finance Limited
62, Dr. Nanjappa Road,
Post Box No. 3745,
Coimbatore – 641 018
NCD Lead Managers
Bonanza Portfolio Limited
NCD Registrar
Link Intime India Private Ltd
Sakthi Finance NCD June 2024
Subscription Status on June 20, 2024, 5.00 pm
| Category | Subscription |
| Retail | 0.00 X |
| HNI | 0.00 X |
| Non-Institutional | 0.00 X |
| Institutional | 0.00 X |
| Total | 0.00 X |
Sakthi Finance NCD June 2024
Sakthi Finance NCD June 2024 Guidance:
1. The company has strong parentage and but small profits. It launched its credit business around 69 years ago with retail credit products and can be termed as the veteran/highly experienced entity of this business.
2. The NCDs have been rated [ICRA] BBB (Stable) by ICRA Limited (ICRA).
3. Coupon rates are attractive.
4. The capital adequacy ratio, computed on the basis of applicable RBI requirements, as on December 31,2023 is18.01% .The capital adequacy ratio as on March 31,2023,March 31, 2022 and March 31, 2021 were 19.68%, 21.66% and 22.52% respectively. As on 31 December 2023, the company has debt equity ratio of 6.16. Small investment may be made
