Founded in 1955 and headquartered in Coimbatore, Sakthi Finance Limited, a part of the Sakthi Group, has carved a niche for itself in the realm of investment and lending, particularly specializing in financing used commercial vehicles. With a rich history spanning nearly seven decades, Sakthi Finance has established a robust presence in South India, catering primarily to small and medium-sized road transport operators (SRTOs/MRTOs) in rural and semi-urban areas.
Company Overview
Sakthi Finance Limited offers financing solutions not only for used commercial vehicles but also for machinery, cars, jeeps, and multi-purpose vehicles used in infrastructure construction. The financing provided is secured by a lien on the financed assets, ensuring a solid foundation of security for its operations.
In addition to its lending activities, Sakthi Finance is also involved in renewable energy generation. The company operates 17 wind power plants with a total capacity of 5,150 kW in Tamil Nadu and Gujarat, selling power to state electricity boards.
As of December 31, 2023, Sakthi Finance reported assets under management (AUM) amounting to ₹1,22,168.76 lakhs, reflecting its substantial footprint in the financial services sector.
Sakthi Finance NCD June 2024 Details
The Sakthi Finance Limited Non-Convertible Debentures (NCDs) issue for June 2024 opened on June 20, 2024, and will close on July 3, 2024. Here are the key details of the NCD issue:
- Issue Size: ₹150.00 Crores (₹75.00 Crores base size + ₹75.00 Crores oversubscription)
- Issue Price: ₹1000 per NCD
- Face Value: ₹1000 each NCD
- Credit Rating: [ICRA] BBB (Stable) by ICRA Limited
- Tenors Available: 24 months, 36 months, 60 months, and 85 months
- Interest Payment Options: Monthly and Cumulative
- Coupon Rates: Varying from 9.00% to 10.25% per annum depending on the series and payment frequency
- Listing: BSE
Series Details and Coupon Rates
The NCDs are available in seven series (Series I to VII) with varying tenors and coupon rates:
- Series 1: 9.00% per annum (Monthly interest payment)
- Series 2: 9.31% per annum (Cumulative)
- Series 3: 9.25% per annum (Monthly interest payment)
- Series 4: 9.58% per annum (Cumulative)
- Series 5: 10.25% per annum (Monthly interest payment)
- Series 6: 10.65% per annum (Cumulative)
- Series 7: 10.38% per annum (Cumulative)
The effective yields range from 9.00% to 10.65% per annum depending on the series and interest payment frequency chosen.
Allocation and Subscription Status
The NCDs are allocated across various categories as follows:
- Institutional: 5%
- Non-Institutional: 15%
- HNI (High Net-Worth Individuals): 40%
- Retail: 40%
As of June 21, 2024, the Sakthi Finance NCD June 2024 issue has been subscribed 0.37 times overall, with the retail category leading at 0.61 times, followed by HNI at 0.31 times.
Use of Proceeds
The net proceeds from the NCD issue will primarily be used for:
- Onward lending and financing activities
- Repayment or prepayment of existing borrowings, including redemption of NCDs
- General corporate purposes
Conclusion
For investors seeking secure investment options with attractive yields, Sakthi Finance Limited’s NCD June 2024 offers a compelling opportunity. Backed by a solid track record, diversified business operations, and a commitment to financial prudence, Sakthi Finance continues to strengthen its position in the market. Interested investors can participate in this issue, available on a first-come, first-serve basis, through BSE-listed NCDs until July 3, 2024.
Invest wisely, and consider consulting with financial advisors to make informed decisions regarding your investment portfolio.
(Disclaimer: Investors are advised to read the full prospectus and consult with financial advisors before making any investment decisions. All data and figures are as per available information at the time of writing
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