Indiabulls Housing Finance’s NCD tranche IV issue opens today

Delhi-headquartered Indiabulls Housing Finance Limited (IBHL) , a non-deposit-taking housing finance company registered with the National Housing Bank, has announced the public issue of secured, redeemable, non-convertible debentures (NCDs) of the face value of Rs 1,000 each. The tranche IV issue opened on December 01, 2022, and will close on December 22, 2022.

The tranche IV issue has a base issue size of Rs 100 crore with an option to retain oversubscription up to Rs 900 crore, aggregating up to Rs 1,000 crore. It offers various series of NCDs for subscription with coupon rates ranging from 8.57 percent to 9.80 percent per annum. The NCDs are proposed to be listed on BSE Limited and the National Stock Exchange of India, with BSE as the designated stock exchange for the tranche IV issue.

The NCDs have been rated "CRISIL AA/Stable" by CRISIL Ratings Limited and "[ICRA]AA (Stable)" by ICRA Limited. They have tenures of 24 months (Series I, II, III), 36 months (Series IV, V, VI), and 60 months (Series VII, VIII). The effective yield (per annum) for the NCD holders in Category I (institutional investors) and Category II (non-institutional investors) ranges from 8.89 percent to 9.30 percent and for Category III (high net-worth individual investors) and Category IV (retail individual investors) holders, it ranges from 9.29 percent to 9.80 percent.

Interest payment modes for the NCDs are annual, monthly, or cumulative as per the series selected by the investors. Amount on maturity for the NCD holders in Category I and Category II ranges from Rs 1,000 to Rs 1,297.15 per NCD and for Category III and Category IV ranges from Rs 1,000 to Rs 1,315.10 per NCD.

The tranche IV issue option has staggered redemption by face value through annual payments under 36 months (Series IV and Series V) and 60 months (Series VII and Series VIII).

A media release issued by the company informed that Indiabulls Housing Finance Ltd is also "offering an additional incentive of 0.25 percent to the Category III and Category IV Investors in the proposed tranche IV issue, who are also holders of NCD(s)/bond(s) previously issued by the company, and/or its subsidiaries as the case may be, and/or are equity shareholder(s) of Indiabulls Housing Finance Limited as the case may be (primary holder/s) on the deemed date of allotment".

The lead managers to the tranche IV issue are Edelweiss Financial Services Limited, AK Capital Services Limited, IIFL Securities Limited, and Trust Investment Advisors Private Limited. IDBI Trusteeship Services Limited is the debenture trustee to the tranche IV issue and KFin Technologies Limited is the registrar of the issue.

Net proceeds of the tranche IV issue, after meeting the expenditures of and related to the issue, at least 75 percent shall be utilised for the purpose of onward lending, financing, and for repayment of interest and principal of existing borrowings of Indiabulls Housing Finance and up to 25 percent for general corporate purposes, the company said in its press release.

Notably, allotments will be made on a date priority basis, i.e., a first-come-first-serve basis, based on the date of upload of each application into the electronic book with the exchanges, in each portion subject to the allocation ratio. However, on the date of oversubscription and thereafter, the allotments would be made to the applicants on a proportionate basis.

As of September 30, 2022, the consolidated cash and cash equivalents of the company were Rs 3,941.51 crore and the borrowings (other than debt securities) were Rs 30,264.10 crore on the balance sheet.