Shriram City Union Finance, part of the Chennai-based Shriram Group, is coming out with a public issue of secured non-convertible debentures for Rs. 250 crore with an option to retain over-subscription up to Rs. 250 crore. The issue opens on September 12. Addressing presspersons here on Tuesday, Subhasri Sriram, Executive Director and Chief Financial Officer, said with many banks announcing a reduction in deposit rates, investors, especially in the retail segment, were turning their attention to non-convertible debentures which offered reasonable returns. Individual investors investing up to Rs. 5 lakh in the NCD issue of Shriram City Union Finance would get a return of 11.5 per cent for a three-year time frame, she said. The yield for those investing for a five-year period would be 11.75 per cent. The company had earmarked 80 per cent of the issue for retail and high networth individual investors on a first-come-first served basis, Ms. Subhasri said.
The proceeds of the issue would be used for various financing activities, and for repayment of existing loans. The focus was on the retail financing segment, with a dominant share of 95 per cent in the small loan segment, Ms. Subhasri said.
As on June 30, 2012, the total loan book size of the company was over Rs. 14,000 crore with loans against gold accounting for over 35 per cent. The company has reported a net profit of Rs. 103 crore, and the net NPA (non-performing assets) ratio was 0.38 per cent as on June 30, 2012.