Sakthi Finance NCD February 2024 Details

    NCD Issue Opens on   8 February 2024Sakthi Finance NCD February 2024 Details
    NCD Issue Closes on 21 February 2024 


    # NCD Guidance will 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 decades in commercial vehicle financing segment. It is registered with RBI, under Section45-IA of the Reserve Bank of India Act, 1934, with Department of Non-Banking Supervision, Chennai, as a NBFC Deposit-taking -Investment and Credit 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.

    Its 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. It 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. It has network of53branches, 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 September 30, 2023, it has an AUM of Rs. 1,19,637.19lakh. Its AUM has grown from Rs. 1,09,353.73 lakh as of March 31, 2021to Rs. 1,14,500.10 lakh as of March 31, 2023, at a CAGR of 2.33%. The income from hire purchase business constitutes about 94% of operating income of the Company for the FY ended March 31, 2023. For FY 2023, the income from hire purchase business was Rs. 18,603.02lakh as against Rs. 16,446.30 lakh for FY 2021, registering a YoY growth of 13.11% and CAGR 4.19%

    Get more details about the company @

    NCD Promoter:
    Dr. M. Manickam and Mr. M. Balasubramaniam are the promoters of the company.

    NCD Rating
    The NCDs proposed to be issued have been rated ‘CRISIL A+/Stable’ by CRISIL Ratings Limited.

    Sakthi Finance NCD February 2024 Detail
    Issue Open February 8, 2024 – February 21, 2024
    Security Name Sakhi Finance Limited
    Security Type Secured, Redeemable, Non-Convertible Debentures (Secured NCDs)
    Issue Size (Base) Rs 10.00 Crores
    Issue Size (Shelf) Rs 100.00 Crores
    Issue Price Rs 1000 per NCD
    Face Value Rs 1000 each NCD
    Minimum Lot size 10 NCD
    Market Lot 10 NCD
    Listing At BSE
    Credit Rating CRISIL A+/Stable’ by CRISIL Ratings Limited
    Tenor 24, 36, 60,85 months
    Series Series I to VII
    Payment Frequency Monthly, 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%
    Total 100%
    NCD’s Offered by Category
    Category  NCD’s Reserved
    Institutional   50,000
    Non-Institutional 150,000
    Retail 4,00,000
    Category 4 4,00,000
    Total NCD’s 1000000
    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 Rs 2,013.13 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% 9.74% 9.25% 10.52% 10.25% 13.17% 14.30%
    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  

    Objects of the Issue
    The company proposes to utilize the funds which are being raised through the Issue:

    The Net Proceeds raised through this Issue will be utilized for the following purposes in the ratio provided below:

    At least 75% for 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.
    Up to 25% for general corporate purposes.




    Sakthi Finance NCD February 2024 Financial Information 
    Period Ended 30-Sep-23 31-Mar-23 31-Mar-22 31-Mar-21
    Assets 1,347.05 1,300.58 1,269.43 1,240.43
    Revenue 100.38 191.94 181.35 171.34
    Profit After Tax 7.2 12.49 9.52 9.26
    Net Worth 182.18 179.27 170.95 164.89
    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 February 2024
    Red Herring Prospectus

    Analysis & Guidance:
    1) Crisil rating has been ‘CRISIL A+/Stable’
    2) Certain parameters require attention. The interest coverage ratio is just 1.18%, which we believe is somewhat risky. Gross Stage 3 Assets ratio is 5.7% and Net Stage 3 Assets ratio is 2.97, which are also on higher side. The company has Tier-1 Capital Adequacy ratio of just 13.40%, which we consider somewhat low. The absolute amounts of net profits, compared to total assets, compared to total income etc. are very small. 
    3) Considering above aspects, the rate of interest is not quite attractive. 
    May be avoided.

    Sakthi Finance NCD February 2024
    Subscription Status 
    On 6.02.2024 @ 5.00 pm
    Category Subscription 
    Institutional 0.00 T
    Non-Institutional 0.00 T
    HNI 0.00 T
    Retail 0.00 T
    Total 0.00 T

    Sakthi Finance NCD February 2024

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