Private housing finance company, Diwan Housing Finance Limited (DHFL), has come out with a public issue of secured redeemable NCDs of face value of Rs 1,000 each, aggregating up to Rs 4,000 crore.
The issue will open on August 3 and close on August 16 and has got AAA ratings by Credit Analysis and Research as well as Brickwork Ratings India.
DHFL has also linked these bonds to the consumer price index (CPI), which has been offered as an option to the investor linking to the coupon rate. The instruments will offer retail investor's a yield return of 9.20 to 9.30 per cent, while the institutions will get 9.1 per cent. These bonds will be 3, 5 and 10-year tenure with monthly, annual and cumulative payments options and the offering will be on first come, first served basis.
The company registered with the National Housing Bank is the second largest private lender in the country, after HDFC in the housing space. With an asset under mortgage of Rs 72,000 crore and 349 office located primarily in tier-2 and 3 towns, DHF has the Capital Adequacy Ratio of 17 per cent. The company will utilise the proceeds of the NCD issue for onward lending, financing and corporate issues.
Speaking with Business Today, Kapil Wadhwan CMD DHFL said: "We are giving an option to the public to reap the benefits of a sound and flexible investment. We could have gone for a private placement to generate funds, but for the first time in the three decades of our business are going to the public with these flexible options to invest into the company."
The company has posted a profit of Rs 729 crore in the previous fiscal and also operates an insurance business under the DHFL Pramerica Life Insurance Company, which was bought from country's largest realty firm DLF Limited in 2013.