For a three-year bond, the company is offering an yearly yield of 11 per cent, while on five-year bond the yield is offered is 11.25 percent. Senior citizens will get an additional yield of 0.25 percent per annum across all tenors.
Used truck financier Shriram Transport Finance today launched a Rs 500-crore non convertible debenture issue, offering a yield of over 10.71 percent to retail investors under multiple tenors.
"We have an option to retain subscriptions till Rs 3,000 crore. But we will close the issue after we get subscriptions of Rs 1,500 crore," company's managing director and chief executive Uday Revankar told reporters here. This is the first issue by a private company under the "shelf prospectus" route, wherein a company can file a single prospectus and hit the market with multiple issues.
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Investors can choose between the three, five and seven years tenors and the yields offered range from 10.71 percent for a five-year investment under the monthly coupon option, to 11.50 percent for a 7-year investment under a yearly coupon.
For a three-year bond, the company is offering an yearly yield of 11 percent, while on five-year bond the yield is offered is 11.25 percent. Senior citizens will get an additional yield of 0.25 percent per annum across all tenors. The issue is open between July 2 and July 22, but may be closed whenever the company feels.
Fifty percent of the issue is reserved for the retail investors, and 30 percent is for high networth individuals, while the rest is divided between institutional investors. Proceeds of the issue will be used both for retiring existing debt and funding ongoing lending activities, said its chief financial officer Parag Sharma.
He said the company's overall cost of funds is at 10.75 percent and the leverage does not exceed six times. During the fiscal, Revankar said the company will focus on expanding its automall and used construction equipment verticals.
After witnessing a correction in the last fiscal due to slowdown in the economy, the commercial vehicles segment will pick up post monsoons once demand from the mining sector comes in, Revankar said.
Shriram Trans stock price
On June 30, 2014, Shriram Transport Finance Corporation closed at Rs 903.05, up Rs 7.70, or 0.86 percent. The 52-week high of the share was Rs 1021.30 and the 52-week low was Rs 465.20.
The company's trailing 12-month (TTM) EPS was at Rs 55.72 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 16.21. The latest book value of the company is Rs 364.65 per share. At current value, the price-to-book value of the company is 2.48.
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