STFC NCD Issue - July 2013 - Product Note

[Amit shah]

Hi!

 

Please find attached Product Note of Public Issue of Secured, Redeemable, Non-Convertible Debentures to be issued by “Shriram Transport Finance Company Ltd” (STFC).

 

Issue is opening on Tuesday, 16th July 2013 and closes on Monday, 29th July 2013^.

^The Issue may close on such earlier date or extended date as may be decided by the company.

 

The Application Forms can be downloaded from below mentioned link:

 

 http://axiscapital.co.in/pdfformsv3/transactions/PDFDownloadList.aspx

 

Shriram Transport Finance Company Ltd

 

Company Profile Shriram Transport Finance Company Ltd (STFC) is one of the largest assets financing NBFC in India. The company’s primary focus is on financing pre-owned commercial vehicles (CV), They also provide financing for passenger vehicles, multi-utility vehicles, 3 wheelers and tractors.   Salient features of the NCD issue l The Issue is in the form of secured, redeemable, non-convertible debentures having options, suiting the needs of different categories of investors. l Credit rating agency CARE has rated the issue ‘CARE AA+’ and CRISIL has rated the NCDs “CRISIL AA/Stable” for an amount of upto Rs. 750 Cr. Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. l An Applicants has the option to apply for NCDs in the physical form or in the dematerialised form except for the Series III NCDs which is issued in Dematerialised option only. l Attractive coupon of 10.90*% for 3 years and 11.15*% for 5 years for “Individual” holders on record date (*Includes additional incentive on coupon for Individual ) l There is no Put /Call options for the NCDs.      l The principal amount of the NCDs together with all interest due on the NCDs shall be secured by adequate assets to ensure 100% asset cover which shall be free from any encumbrances. NCD holders shall be secured by way of first and exclusive charge in favour of the Debenture Trustee on an identified immovable property and specified future receivables of the Company as decided by the Company & Debenture Trustee. l STFC shall pay interest on application money on the amount allotted to the applicant other than ASBA Applicants, at the rate of  9.00%p.a. and  interest on application money which is liable to be refunded to applicants at the rate of  2.50%p.a., subject to deduction of income tax under the provisions of the Income Tax Act, 1961, as amended. l Allotments shall be made on a first-come first serve basis, based on the upload of each Application into the electronic book of the Stock Exchange, in each Portion subject to the Allocation Ratio. l The NCDs will be listed on NSE & BSE and will be available in Demat form facilitating trading of these NCDs. l As per clause (ix) of Section 193 of the I.T. Act, NO TAX will be deducted at source from the interest on listed NCDs held in the dematerialized form. l Individual Investors (Retail & HNI ) holding the NCDs on any record date, shall be eligible to additional incentive in terms of interest in case of Series I , II and III and redemption premium amount in case of Series IV and V respectively.

 

Issue Size	Rs.750 Crores
Min Application Size	Rs.10,000/-  ( 10 NCDs)
Thereafter in multiples of	Rs.1000/-    ( 1 NCD )
Credit Rating	“AA+” from CARE and “AA/Stable” from CRISIL
Issuance of NCDs	The Allotment of the NCDs will be in a dematerialised form as well as physical form except for series III –NCDs will be issued only in dematerialized form.
Trading	In dematerialised form only
Category	I - QIB		II – Corporate		III – Individual -HNI			IV – Individual –Retail
Category Allocation	10% of the overall Issue Size.		10% of the overall Issue Size.		30% of the overall Issue Size. ( Above Rs.5 Lacs)			50% of the overall Issue Size.  ( upto Rs.5 Lacs)
Tenor	36 Months		60 Months		60 Months		36 Months		60 Months
Interest Frequency	Annual		Annual		Monthly		Cumulative		Cumulative
Category	Individual	Non Individual	Individual	Non Individual	Individual	Non Individual	Individual	Non Individual	Individual	Non Individual
Coupon Rate (%)p.a.	9.65%		9.80%		9.40%		N.A.		N.A
Additional Coupon Rate (%_ p.a.	1.25%	NIL	1.35	NIL	1.23	NIL	N.A.		N.A.
Aggregate Coupon Rate (%) p.a.	10.90%	9.65%	11.15%	9.80%	10.63%	9.40%	N.A.		N.A.
Effective Yield (%)p.a.	10.90%	9.65%	11.15%	9.80%	11.15%	9.80%	10.90%	9.65%	11.15%	9.80%
Redemption  Amount	Face Value + any accrued interest at the Redemption Date + Additional Incentive as may be applicable		50% of Face Value at the end of 48 Months & 50% of Face value at the end of 60 Months + any accrued interest at the Redemption Date + Additional Incentive as may be applicable		Face Value + any accrued interest at the Redemption Date + Additional Incentive as may be applicable		Individual	Non Individual	Individual	Non Individual
							1364.33 per NCD	1318.67 per NCD	763.37 per NCD at the end of 48 Months & 848.48 per NCD at the end of 60 Months	726.93 per NCD at the end of 48 Months & 798.17 per NCD  at the end of 60 Months
Put Call Option	None
Listing	Proposed on BSE and NSE
Trustee	IDBI Trusteeship Services Limited
Interest on Application Money	Interest on application money on the amount allotted to the applicant other than ASBA Applicants, at the rate of  9.00%p.a. and  interest on application money which is liable to be refunded to applicants at the rate of  2.50%p.a., subject to deduction of income tax under the provisions of the Income Tax Act, 1961, as amended.

 

Eligibility to Additional Incentive

Individual Investors (Retail & HNI ) holding the NCDs on any record date, shall be eligible to additional incentive in terms of interest in case of Series I , II and III and redemption premium amount in case of Series IV and V respectively.

 

Note:  Application will be rejected if banked without uploading in the electronic system of the recognised stock exchanges.

 

Cheque/DD Details

All cheques / bank drafts accompanying the application should be crossed “A/c Payee only” and must be made payable to “Escrow Account STFC NCD V Public issue”

 

Who can apply?
	Category I  (Institutional Buyers) (“Institutional”):   ·       Resident public financial institutions as specified in Section 4 A of the Companies Act authorized to invest in the NCDs; ·       Statutory corporations, commercial banks, co-operative banks and regional rural banks incorporated in India and authorized to invest in the NCDs; ·       Indian Provident funds, pension funds, superannuation funds & gratuity funds, authorized to invest in the NCDs; ·       Indian alternative investment funds registered with SEBI; ·       Indian insurance companies registered with the IRDA; ·       Indian Mutual Funds registered with SEBI; ·       National Investment Fund set up pursuant to the resolution F. No. 2/3/2005-DD-II dated November 23, 2005 by the Government of India; and ·       Insurance funds set up and managed by the Indian army, navy or the air force of the Union of India or by the Department of Posts, India   Category II (Non Institutional Investors -(Non Institutional): Companies, bodies corporate and societies, registered under the applicable laws in India, and authorized to invest in the NCDs; Trusts settled under the Indian Trusts Act, 1882, public/private charitable/religious trusts settled and/or registered in India under applicable laws, which are authorized to invest in the NCDs; Resident Indian scientific and/or industrial research organizations, authorized to invest in the NCDs; Partnership firms formed under applicable laws in India in the name of the partners, authorized to invest in the NCDs; and Limited Liability Partnerships formed and registered under the provisions of the Limited Liability Partnership Act, 2008 (No. 6 of 2009), authorized to invest in the NCDs.   Category III (High Net worth Individual Investors) (HNIs):  Resident Indian individuals and Hindu Undivided Families through the Karta applying for NCDs aggregating to a value exceeding Rs.5,00,000, across all Series of NCDs in the Issue.   Category IV (Retail Individual Investors) (RIIs): ·         Resident Indian individuals and Hindu Undivided Families through the Karta applying for NCDs aggregating to a value not more than Rs.5,00,000 across all Series of NCDs in the Issue.
Application cannot be made by :
Minors without a guardian name*;   (* guardian is competent to contract under Indian Contract Act, 1872)          Foreign nationals inter-alia including any NRIs who are (i) based in the USA, and/or, (ii) domiciled in the USA, and/or, (iii) residents/citizens of the USA, and/or, (iv) subject to any taxation laws of the USA;          Persons resident outside India;          Foreign Institutional Investors;           Qualified Foreign Investors;          Overseas Corporate Bodies; and          Persons ineligible to contract under applicable statutory/regulatory requirements.

 

Note: All categories of persons who are individuals or natural persons (including HUF acting through their Karta) including without limitation HNI & Retail Individual Investors who are eligible under applicable laws to hold the NCDs are collectively referred to as “Individuals”.

 

All categories of entities, associations, organizations, societies, trusts, funds, partnership firms, Limited Liability Partnerships, bodies corporate, statutory and/or regulatory bodies and authorities and other forms of legal entities who are NOT individuals or natural persons and are eligible under applicable laws to hold the NCDs including without limitation Institutional Investors and Non Institutional Investors are collectively referred to as “Non Individuals”.