Sakthi Finance NCD opens for subscription on 08 February 2024. The company aims for a base issue size of ₹100 Crores.
About the company
Incorporated in 1955, Sakthi Finance is an investment and credit company with a 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 a lien on the assets financed. The company’s target customers predominantly comprise small/medium road transport operators and primarily hail from rural / semi-urban areas. It has identified this opportunity and positioned itself between the organized banking sector and local money lenders by offering finance at a competitive rate with flexible and speedy lending services to its customers.
Sakthi Finance 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 a network of 53 branches, located in Tamil Nadu, Kerala, Andhra Pradesh, Karnataka, Maharashtra, Haryana, and the Union Territory of Puducherry. In addition to finance business, it generates power from windmills and sells it to the Tamil Nadu Electricity Board and Gujarat Urja Vikas Nigam Limited. At present, the company has 17 windmills with an aggregate capacity of 5,150 kW located in the states of Tamil Nadu and Gujarat.
As of 30 September 2023, the company has an Asset Under Management (AUM) (i.e. Stock on Hire) of INR 1,196.37 crore. The AUM (net of ECL provisions) has grown from INR 1,093.54 crore as of 31 March 2021 to INR 1,145 crore as of 31 March 2023 at a CAGR of 2.33%.
Objectives of the Issue
- 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 Details
| Issue Open | February 8, 2024 – February 21, 2024 |
| Security Name | Sakthi Finance Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | ₹ 100 Crores |
| Issue Size (Oversubscription) | ₹ 100 Crores |
| Overall Issue Size | ₹ 200 Crores |
| Issue Price | ₹ 1000 per NCD |
| Face Value | ₹ 1000 for each NCD |
| Minimum Lot Size | 10 NCD |
| Market Lot | 1 NCD |
| Listing At | BSE |
| Credit Rating | [ICRA] BBB (Stable) by ICRA Limited (ICRA). |
| 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 |
Sakthi Finance NCD Options and Coupon Rates
| Option | Tenure | Interest Payment | Coupon Rate | Effective Yield | Maturity Amount |
| Series 1 | 24 months | Monthly | 9.00% | 9.00% | ₹ 1,000 |
| Series 2 | 24 months | Cumulative | NA | 9.74% | ₹ 1,194.83 |
| Series 3 | 36 months | Monthly | 9.25% | 9.25% | ₹ 1,000 |
| Series 4 | 36 months | Cumulative | NA | 10.52% | ₹ 1,315.66 |
| Series 5 | 60 months | Monthly | 10.25% | 10.25% | ₹ 1,000 |
| Series 6 | 60 months | Cumulative | NA | 13.17% | ₹ 1658.72 |
| Series 7 | 85 months | Cumulative | NA | 14.30% | ₹ 2,013.13 |
Sakthi Finance NCD Rating
The NCDs proposed to be issued by the company are rated [ICRA] BBB (Stable) by ICRA Limited (ICRA).
Company Financials
| Period Ended | 30 Sep 2023 | 31 Mar 2023 | 31 Mar 2022 | 31 Mar 2021 |
| 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 | 7.20 | 12.49 | 9.52 | 9.26 |
| Net Worth | 182.18 | 179.27 | 170.95 | 164.89 |
Sakthi Finance NCD Allocation Ratio
NCD’s Offered by Category
| Category | NCD’s Reserved |
|---|---|
| Institutional | 50,000 |
| Non-Institutional | 150,000 |
| HNI | 400,000 |
| Retail | 400,000 |
| Total NCD’s | 1,000,000 |
Company Promoters
- Dr. M. Manickam
- Mr. M. Balasubramaniam
Sakthi Finance NCD Lead Manager
BONANZA PORTFOLIO LIMITED
Bonanza House, Plot No. M-2 Cama Industrial Estate,
Walbhat Road, Behind the Hub Goregaon (East), Mumbai – 400 063
Phone: +91 022 68363773 / +91 011 61271909
Email: swati.agrawal@bonanzaonline.com
Website: www.bonanzaonline.com
Sakthi Finance Registrar
LINK INTIME INDIA PRIVATE LIMITED
C-101, 1st Floor, 247 Park
L.B.S. Marg, Vikhroli West
Mumbai – 400 083, Maharashtra
Phone: +91 810 811 4949
Email: sakthifinance.ncd2023@linkintime.co.in
Website: www.linkintime.co.in
Company Contact Details
SAKTHI FINANCE LIMITED
62, Dr. Nanjappa Road, Post Box No. 3745,
Coimbatore – 641 018, Tamil Nadu
Phone: +91 (422) 2231471-474/4236200
Email: csubramaniam@sakthifinance.com
Website: www.sakthifinance.com
Final Thoughts
Non-convertible debentures (NCDs) are a better investment option for those who are looking for a diversified portfolio. investing in Sakthi Finance NCD is purely your personal choice. make a good study and analysis before you make the investment decision.
Happy Investing
