DHFL to raise Rs 10,000 cr via NCDs

The Dollar Business Bureau

Mortgage firm DHFL on Friday announced its agenda to increase Rs.10,000 crore from non-convertible debentures (NCDs) to enable business growth. 

“The NCD issue of face value of Rs.1,000 each with a base issue size of Rs.2,000 crore and an option to retain oversubscription of up to Rs.8,000 crore aggregating up to Rs.10,000 crore opens on August 29,” DHFL said in a statement. 

The government has already taken several measures to grant housing finance companies smooth supply of capitals for the low-cost housing sector. 

“The company is tapping various funding sources innovatively at optimal cost,” DHFL Chairman and Managing Director Kapil Wadhawan said. 

"Our first NCD public issue set new benchmarks in housing finance sector and our forthcoming follow on issue will seek to replicate the aggressive penetrative marketing to tap the pool of liquidity available in the market. While reducing our total cost of borrowing, this Issue will establish a strong yield curve for DHFL instruments in the market," Wadhawan said. 

The interest rate on proposed NCDs varies ranges from 9.05% to 9.25%. 

The follow-on secured NCD Issue has a new issue structure with also the 7-year tenor with annual frequency of interest payment, he said. 

High Networth Individuals (HNIs) and retail individual investors currently have a a total allocation ratio of 60%. 

Interest on application money is at 8 per cent and interest on refunded money is at 6 per cent, it said.