The finance committee of Poonawalla Fincorp approved the issuance of secured, redeemable, rated and listed non-convertible debentures at a face value of Rs 1 lakh each for up to Rs 750 crore through private placement.
The company has set a base issue of Rs 250 crore, along with a green-shoe option to retain oversubscription of Rs 500 crore. Poonawalla Fincorp will pay coupon on the NCDs at a "rate of 2% over and above the applicable coupon rate for any delay in payment of interest", according to an exchange filing on Wednesday.
An NCD is a fixed-income instrument that provides structured returns to investors. As NCDs are unsecured and not backed by assets, the market participants evaluate the issuing company's creditworthy and debt-servicing capacity before allotment.
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In April, the Pune-headquartered firm approved to raise Rs 1,875 crore through the issuance of NCDs on a private placement basis.
Poonawalla Fincorp's net profit shrank 81% Rs 62 crore in the January- March period. Analysts tracked by Bloomberg had a consensus estimate of Rs 138.4 crore.
Shares of Poonawalla Fincorp closed 1.84% higher at Rs 390.35 apiece on the National Stock Exchange, compared to a 0.36% rise in the benchmark Nifty. The stock has fallen 16.71% in the last 12 months and risen 24.18% on a year-to-date basis.
Out of the eight analysts tracking the company, four have a 'buy' rating on the stock, two recommend 'hold' and as many suggest 'sell', according to Bloomberg data. The average of 12-month analysts' price target implies a potential upside of 1%.
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