Shriram Transport Finance Company (STFC), has come out with a public issue of secured and unsecured non-convertible debentures aggregating to Rs. 250 crore with an option to retain oversubscription upto Rs. 250 crore. The issue is open from May 17 to 31, 2010. The face value of the debenture is Rs. 1,000. The minimum investment is Rs. 10,000 and in multiples of Rs. 1,000. The debentures carry various interest payment options and the redemption periods are 60 months and 84 months depending upon the options exercised. The coupon rates vary from 9 per cent to 9.75 per cent with senior citizens getting additional 0.25 per cent. The effective yield varies from 9 per cent to 11.25 per cent for different options and tenures.
Addressing presspersons here on Monday, R. Sridhar, Managing Director, said the secured NCDs have been rated ‘CARE AA+’ by CARE and ‘AA/Stable’ by CRISIL. The unsecured debentures have been rated as ‘CARE AA’ and ‘AA/Stable’ by the rating agencies respectively. He said 80 per cent of the issue has been reserved for retail investors.
The funds raised will be used to repay its existing loans and to finance the lending and investment activities.
Mr. Sridhar said the company’s focus was on financing pre-owned commercial vehicles to first time users with niche presence in small road transport operators segment. He said 75 per cent of the truck population was in the small operators segment who owned one or two vehicles.
The company was also engaged in equipment financing and the plan was to start an equipment finance subsidiary in due course. Mr. Sridhar said the company had witnessed huge potential in financing second hand trucks.
