SREI Equipment Finance Limited NCD
Srei Equipment Finance Ltd. (SEFL) has emerged as one of the major equipment financiers in India. The company enjoys a Pan-India presence with offices in 89 locations. SEFL has an experienced management team having significant expertise in financial services.
They take pride in being the partners in progress for more than 58,000 customers. The Company has a wide spectrum of customers includes First Time Users, First Time Buyers of equipment, Fleet Owners, Small Contractors, and large construction companies.
They inroad into Information Technology, Healthcare and Farm equipment solutions have further strengthened their offerings to the diverse customer community they cater.
What truly differentiates us is our ability to provide holistic ‘Asset Solution’ rather than being just the financier. We enable our clients across the life-cycle of the asset; namely, procurement, deployment, maintenance, and disposal. They offer an entire range of Equipment Rental, Asset Management, Valuation and Disposal services.
A> They are the pioneers in equipment financing the country with a legacy of more than 25 years and are one of the largest Construction & Mining equipment financiers in India.
B> They are the pioneers in providing used equipment financing.
C> They are the pioneers in offering Construction & Mining equipment on lease.
D> They have pioneered the financing of sophisticated imported equipment for the infrastructure, construction, and mining industry.
Letter of Offer of NCD
Objective of NCD SREI Equipment Finance Limited NCD:
Objective of
SREI Equipment Finance Limited NCDSREI Equipment Finance Limited NCD
are: 1. Lending/ repayment of the loans- minimum 75% of the Net Proceeds of the Issue. 2. General Corporate Purposes- up to 25% of the Net Proceeds of the Issue.SREI Equipment Finance Limited NCD Details:
| Open Date: | Dec 19 2018 |
| Close Date: | Jan 18 2019 |
| Issue Type: | Fixed Price Issue NCD |
| Issue Size: | ₹ 300 Cr. |
| Face Value: | ₹ 1000 Per NCD |
| Market Lot: | 1 NCD |
| Minimum Order Quantity: | 10 NCD |
| Listing At: | BSE |
Promoters:
The promoter of the company is Srei Infrastructure Finance Limited.
Credit Rating:
This issue is rated BWR/AA+ (stable) by Brickwork Ratings and ACUITE AA+/(stable) by ACUITE Ratings. Issues with such ratings are considered to have a high degree of safety regarding timely servicing of financial obligations and carry very low credit risk.
Interest Rates:
| Series | I | II | III | IV | V | VI | VII | VIII | Ixs |
| Interest Payment | N.A. | Annual | Monthly | Annual | N.A. | Monthly | Annual | N.A. | Annual |
| Nature | Secured | Secured | Secured | Unsecured | |||||
| Tenor | 400 days | 3 Years | 5 years | 10 years | |||||
| Minimum Application | 10,000( 10 NCDs) across all series | ||||||||
| Face Value | 1000 | ||||||||
| In Multiples of | 1000(1 NCD) | ||||||||
| Category 1, II and II | N.A | 9.75% | 9.81% | 10.25% | NA | 10.05% | 10.50% | NA | 10.75% |
| Effective Yield (%) | 10% | 9.85% | 10.25% | 10.29% | 10.25% | 10.52% | 10.53% | 10.50% | 10.76% |
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 Individuals.
(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 SREI Equipment Finance Limited NCD by InvestorZone team => 3/10
1-5: Fair
5-7: Good
7-10: Excellent
The Company has D/E of more than 6 and Current Ratio < 1 which is worrysome sign.
High D/E- Companies operating with high debt to equity on their balance sheets are vulnerable to economic cycles. In times of slowdown in the economy, companies with high levels of debt find it increasingly difficult to service the interest on their borrowings as profit margins decline.
We have already seen due to ILFS crisis the funding is a big issue with the lending companies and margins will be under pressure in coming quarters.
Low Current ratio- Higher current ratio implies healthier short-term liquidity comfort level. A current ratio below 1 indicates that the company may not be able to meet its obligations in the short run.
Lead Manager of SREI Equipment Finance Limited NCD:
- Edelweiss Capital Limited
- IIFL Holdings Limited
- Tipsons Consultancy Services Private Limited
- Trust Investment Advisors Private Limited
Registrar of SREI Equipment Finance Limited NCD:
- Karvy Computershare Private Limited
Discussion on SREI Equipment Finance Limited NCD:
4 Comments
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Is it worth investing now for atleast 400 days
No. Go for Mahindra NCD
First come first serve basis NCD.
Avoid.