Sakthi Finance NCD – February 2024

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 OpenFebruary 8, 2024 – February 21, 2024
Security NameSakthi Finance Limited
Security TypeSecured, 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 Size10 NCD
Market Lot1 NCD
Listing AtBSE
Credit Rating[ICRA] BBB (Stable) by ICRA Limited (ICRA).
Tenor24, 36, 60 and 85 Months
SeriesSeries I to VII
Payment FrequencyMonthly and Cumulative
Basis of AllotmentFirst Come First Serve Basis
Debenture Trustee/sCatalyst Trusteeship Limited

Sakthi Finance NCD Options and Coupon Rates

OptionTenureInterest PaymentCoupon RateEffective YieldMaturity Amount
Series 124 monthsMonthly9.00%9.00%₹ 1,000
Series 224 monthsCumulativeNA9.74%₹ 1,194.83
Series 336 monthsMonthly9.25%9.25%₹ 1,000
Series 436 monthsCumulativeNA10.52%₹ 1,315.66
Series 560 monthsMonthly10.25%10.25%₹ 1,000
Series 660 monthsCumulativeNA13.17%₹ 1658.72
Series 785 monthsCumulativeNA14.30%₹ 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 Ended30 Sep 202331 Mar 202331 Mar 202231 Mar 2021
Profit After Tax7.2012.499.529.26
Net Worth182.18179.27170.95164.89
(Amount in ₹ Crore)

Sakthi Finance NCD Allocation Ratio

Category NCD’s Allocated

NCD’s Offered by Category

Category NCD’s Reserved
Total NCD’s1,000,000

Company Promoters

  • Dr. M. Manickam
  • Mr. M. Balasubramaniam

Sakthi Finance NCD Lead Manager

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

Sakthi Finance Registrar

C-101, 1st Floor, 247 Park
L.B.S. Marg, Vikhroli West
Mumbai – 400 083, Maharashtra
Phone: +91 810 811 4949

Company Contact Details

62, Dr. Nanjappa Road, Post Box No. 3745,
Coimbatore – 641 018, Tamil Nadu
Phone: +91 (422) 2231471-474/4236200

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

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