The Hindu Business Line
Magma Fincorp to raise ₹1,000 crore via NCDs in FY20
Mumbai-headquartered NBFC Magma Fincorp plans to raise ₹1,000 crore through non-convertible debenture (NCD) issues this fiscal. The company aims to raise ₹500 crore immediately through the first tranche.
The second tranche, where the firm will raise another ₹500 crore, would follow later. The first tranche comprises a base issue of ₹200 crore, and a greenshoe option of ₹300 crore. This is the company’s first public issue of secured redeemable NCDs, which will open on April 8 and close on May 8 (with an option of early closure or extension).
“We are in the lending business, and money is the raw material for us. This issue will help boost our long-term working capital, as this issue is for three tenures – three years, five years and 10 years – and will be deployed across our three lines of businesses, depending on the demand appetite,” said Sanjay Chamria, Vice-Chairman and MD at Magma Fincorp. The company’s business lines are vehicles (passenger vehicles, trucks, buses, construction equipment and tractors), affordable Sanjay Chamria, Vice-Chairman and MD, Magma Fincorp, announces the public issue of NCDs in Mumbai on Wednesday
housing, and unsecured small and medium enterprise lending. In FY19, all the three sectors had grown by more than 20 per cent, and the firm expects this growth to continue in FY20 also.
The NCDs offered through the first tranche would be listed on the BSE and the NSE. Edelweiss Financial Services and AK Capital Services are the lead managers to the issue.
“This is the maiden issuance of NCDs by Magma to retail investors. So far, we have done plenty of NCD issues, but all to institutional investors.
“So, we also want to see the response and how does the retail franchise look like and accept Magma as a name,” said Chamria, adding that the second tranche would be based on the success of the first issuance.