L&T Finance NCD 2019- Tranche-III
(i) The L&T Finance limited in Feb-19 has submitted the prospectus to SEBI for raising money by issuing secured redeemable non -convertible debentures of face value of ₹ 1,000 Indian rupees one thousand) each (“Secured NCDs”) and/or unsecured, subordinated, redeemable non – convertible debentures of face value of ₹ 1,000 (Indian rupees one thousand) each (“Unsecured NCDs ”) for an amount up to ₹ 5000 Cr (“shelf limit”).
(ii) L&T Finance will raise 5000 Cr in different Tranches.
Tranche I ( March-2019 and got fully subscribed on day 1)
The Company last month has come up with a 1500 Cr NCD in which issue size was Rs 500 crore, with a greenshoe option of Rs 1,000 crore. The company got a very good response and as NCD is a” first come first serve basis” the issue closed in just 2 days. Last month, the company had raised Rs 2,228.06 crore in the first tranche against a plan to mop up Rs 1,500 crore.
Tranch-II ( April-2019 and got fully subscribed on day 1)
Public Issue of Non-Convertible Debentures Of Face Value Of Rs.1000 Each For an amount of Rs. 500 Crore with an option to retain oversubscription up to Rs. 500 Crore Aggregating Up To Rs.1,000 Crore (“Tranche 2 Issue”).
In Tranche-II the company is offering coupon rates for 3, 5 and 8 years between 8.48 to 9.05 which was slightly lower than the Tranche-I issue.
Tranch-III( Opening on 16-12-2019)
Public Issue of Non-Convertible Debentures of Face Value Of Rs.1000 Each For an amount of Rs. 500 Crore with an option to retain oversubscription up to Rs. 1000 Crore Aggregating Up To Rs.1,500 Crore (“Tranche 3 Issue”).
Objective of NCD L&T Finance NCD 2019- Tranche-III:
(i) For the purpose of onward lending, financing, refinancing the existing indebtedness of L&T Finance Limited ( payment of the interest and /or repayment /prepayment of the principal of borrowings.
(ii) For General Corporate Expense.
L&T Finance NCD 2019- Tranche-III Details:
| Open Date: | Dec 16 2019 |
| Close Date: | Dec 18 2019 |
| Issue Size: | ₹ 1500 Cr. |
| Face Value: | ₹ 1000 Per NCD |
| Market Lot: | 10 NCD |
| Minimum Order Quantity: | 1 NCD |
| Listing At: | NSE,BSE |
Promoters:
The promoter is L&T Finance Holdings Limited.
Credit Rating:
(i) ICRA AAA (stable) (pronounced as ICRA triple-A with Stable outlook) for an amount of ₹ 5,00,000 lakhs, by ICRA Limited (“ ICRA ”).
(ii) CARE AAA / Stable (pronounced as CARE triple-A with Stable Outlook) for an amount of ₹ 5,00,000 lakhs, by CARE Ratings Ltd. (“CARE”).
The rating of NCDs by ICRA and CARE indicates that instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations and carry the lowest credit risk.
Interest Rates:
| Particulars | Series 1 | Series 2 | Series 3 | Series 4 | Series 5 | Series 6 |
| Frequency of Interest Payment | Monthly | NA | Monthly | Annually | Monthly | Annually |
| Tenor | 36 M | 36 M | 36 M | 60 M | 60 M | 84 M |
| Coupon Rate (Retail) for Category I & II | 8.25% | NA | 7.96% | 8.45% | 8.15% | 8.50% |
| Coupon Rate (Retail) for Category III & IV | 8.45% | NA | 8.15% | 8.60% | 8.29% | 8.65% |
Post Tax returns:
(i) Sold after Maturity :
The interest earned through NCDs will be added to the total income and will be taxed at 5%, 20%, and 30% respectively depending upon the income slab of an Individual.
(ii) Sold Before Maturity:
If you decide to sell the NCDs on the stock exchange, capital gains can also arise. If NCDs are sold within a period of 12 months from the date of allotment, short term capital gains/loss (STCG) will arise and if you decide to sell NCDs after a period of 12 months, the resulting gain or loss is called long term capital gains/loss (LTCG)
Recommendation:
Review and Recommendation of L&T Finance Limited NCD- Tranche-III by InvestorZone team: 5/10
IZ Review
(i) The company has good fundamentals.
(ii) The company has a good pedigree of management.
(iii) The investors who are looking for something more than FD can surely have a look in this NCD.
(iv) The Tranche-II NCD which came in April-19 got an excellent response.
Lead Manager of L&T Finance NCD 2019- Tranche-III:
- A. K. Capital Services Limited
- Edelweiss Capital Limited
- JM Financial Consultants Private Limited
- Trust Investment Advisors Private Limited
Registrar of L&T Finance NCD 2019- Tranche-III:
- Link Intime India Private Limited
Discussion on L&T Finance NCD 2019- Tranche-III:
3 Comments
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https://www.linkintime.co.in/BONDS/AllotmentDetails.html
How could Series 1 and Series 3 both have identical tenure and interest payment frequency? 36 M / Monthly?
Apply with full force.