India Infoline Finance Ltd. (IIFL), a non-banking finance company (NBFC) and a subsidiary of India Infoline, is tapping the capital market with a public issue of unsecured redeemable non-convertible debentures (NCDs).

Rs.1,000 face value

The NCDs will have a face value of Rs.1,000 each and the base issue aggregates Rs.250 crore with the company having the option to retain oversubscription up to a further Rs.250 crore giving a total of Rs.500 crore. The issue opens for subscription on September 5 and closes on September 18. The NCDs will be listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The tradable lot size is one NCD.

Addressing a press conference, Nirmal Jain, Founder Chairman, India Infoline Group, said, “While the Indian financial sector has been deepening over a decade, in terms of financial intermediation, India is under-penetrated. Our business strategy is to focus on secured retail lending. The funds raised would be for the NBFC and all our products and would be adequate for at least two years.’’

IIFL’s products include mortgage loans, capital market financing, gold loans and healthcare financing.

The NCDs are in the nature of subordinated debt and will be eligible for Tier-II capital. There are three investment options all with a redemption date of 72 months — Monthly interest payment option with effective annual yield of 13.52 per cent, annual interest payment option with an effective annual yield of 12.75 per cent and the redemption premium option where the NCDs will be redeemed at Rs.2,054.5 at the end of 72 months with an effective yield of 12.75 per annum.

Loan book size

As on March 31, 2012, IIFL’s consolidated loan book was Rs.6,746 crore with mortgage loans accounting for 45 per cent, capital market finance for around 12 per cent and gold loans for 41 per cent. Consolidated net non-performing assets were 0.40 per cent. The standalone capital adequacy ratio was 17.86 per cent.

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