•Options of 3-, 5-, 7- years tenor with annual payment options.
•Triple A Rating: “CARE AAA” by CARE ; “BWR AAA” Outlook: Stable by Brickwork
•Attractive Annual Yield ranging from 9.05% to 9.25% p.a. (from 9.10% to 9:25% p.a. for Retail/ HNIs)
•Upto 7-year tenor with annual frequency of Interest Payment
•Issue size of Rs. 2,000 crore with option to retain over-subscription up to Rs. 8,000 crore
•Listing of NCDs proposed on NSE and BSE
•Allotment on first-come, first-served basis
•Investors have an option to apply for NCDs in dematerialized or in physical form
Mumbai, August 25, 2016 ( GPN ): Dewan Housing Finance Corporation Limited (“DHFL” or the “Company”), a private sector housing finance company registered with National Housing Bank (“NHB”), proposes to open on Monday, August 29, 2016, public issue of secured redeemable Non-Convertible Debentures (“NCD”) of face value of Rs. 1,000 each with a Base Issue Size of Rs. 2,000 crore and an option to retain oversubscription up to Rs. 8,000 crore aggregating up to Rs. 10,000 crore (“Shelf Limit”) (“Issue”); by way of Tranche 1 Prospectus dated August 25, 2016, to be read together with the Shelf Prospectus dated August 25, 2016 (“Prospectus”) (“Tranche I Issue”). The Issue is scheduled to close on September 12, 2016, with an option of early closure or extension as decided by the Board of Directors of the Company (“Board”) or the Finance Committee.
The Secured NCDs proposed to be issued under this Issue have been rated ‘CARE AAA (Triple A)’ for an amount of Rs. 10,000 crore by Credit Analysis and Research Limited (“CARE”) vide their letter dated August 17, 2016 and BWR AAA (Pronounced as BWR Triple A) Outlook: Stable for an amount of Rs. 10,000 crore, by Brickwork Ratings India Private Limited (“Brickwork”) vide their letter dated August 16, 2016. The rating of CARE AAA by CARE and BWR AAA, Outlook: Stable by Brickwork indicates that instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry the lowest credit risk. The minimum application amount is Rs. 10,000 (10 NCDs) collectively across all options on NCDs and in multiples of One (1) NCD after the minimum application. Allotment is on a first-come-first-serve basis (except on the date of oversubscription, if any, when all the investors applying on the said date will get allotment on a proportionate basis). Investors have an option to apply for NCDs in dematerialized as well as physical form.
Mr. Kapil Wadhawan, Chairman & Managing Director, DHFL, said, “DHFL aims to channelize its credit flow to increase home ownership in the country in the context of the Government’s ‘Affordable Housing for All’ agenda. With the Government taking several steps to grant housing finance companies better supply of funds for the low-cost housing sector, DHFL is tapping various funding sources innovatively at optimal cost. Our first NCD Public Issue set new benchmarks in the 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. Our objective is to continue to service the needs of the LMI segment while growing profitability and enhancing stakeholder value.”
Mr. Harshil Mehta, CEO, DHFL, added, “The future of Housing Finance segment will be defined by disruptive technologies and product innovation with a push to reach a larger set of customers. Securitization of home loan portfolio together with appropriate ratings and guarantee structures are imperative to support the growing resource needs of the financial system. As a comprehensive financial services & solution provider, DHFL has been seeking new-age ways to reach out to customers with products catering to their diverse financial needs. Our key strengths enable us to maintain a conservative risk profile while taking advantage of significant growth opportunities. DHFL’s first-ever NCD Public Issue has helped to deepen the debt market in India and explore new avenues of attracting funding to take care of the burgeoning demand for housing finance. The follow-on Secured NCD Issue has a new Issue Structure with also the 7-year tenor with annual frequency of Interest Payment. All options have fairly attractive annual yield for the investor.”
Differentiated Issue Structure with Fairly Attractive Yields
In Series I, the tenor is 3 years and the frequency of coupon payment is annual; the coupon rate for NCD Holders in Category I & Category II is 9.05%; the coupon rate for NCD Holders in Category III & Category IV investors is 9.10%; effective yield per annum for NCD Holders in Category I & Category II investors is 9.05%; effective yield per annum for NCD Holders in Category III & Category IV investors is 9.10%.
In Series II, the tenor is 5 years and the frequency of coupon payment is annual; the coupon rate for NCD Holders in Category I & Category II is 9.05%; the coupon rate for NCD Holders in Category III & Category IV investors is 9.15%; effective yield per annum for NCD Holders in Category I & Category II investors is 9.05%; effective yield per annum for NCD Holders in Category III & Category IV investors is 9.15%.
In Series III, the tenor is 7 years and the frequency of coupon payment is annual; the coupon rate for NCD Holders in Category I & Category II is 9.05%; the coupon rate for NCD Holders in Category III & Category IV investors is 9.25%; effective yield per annum for NCD Holders in Category I & Category II investors is 9.05%; effective yield per annum for NCD Holders in Category III & Category IV investors is 9.25%.
[Category IV Investors (Retail Individual Investors) are defined as Resident Indian individuals and HUFs through the Karta applying for an amount aggregating for an amount up to and including Rs. 10 lakh, across all Series of NCDs. Category III Investors (High Net-worth Individuals or HNIs) Investors are Resident Indian individuals and HUFs through the Karta applying for an amount above Rs. 10 lakh, across all Series of NCDs].
Retail Individual Investors and High Net Worth Individuals (HNIs) have a combined allocation ratio of 60% and Retail Individual Investors (followed by HNIs) will get the priority in case of under subscription in any other investor categories. Interest on Application Money is at 8.00% p.a. and Interest on Refunded Money is at 6.00% p.a. Our Company shall not undertake any public issuance of debt securities under any shelf prospectus or prospectus other than through one or more Tranche Prospectuses under this Shelf prospectus dated August 25, 2016, in the current financial year.
Over the last three decades, DHFL has been a LMI (Low & Middle Income) focused housing finance company in the semi urban and tier 2 and 3 locations. The Company has been growing consistently, witnessing a steady increase in revenue and profits every sequential quarter. The Company’s Assets Under Management (AUM) has been growing consistently due to its emergence as a comprehensive financial services provider over the years. The Company proposes to utilise the funds which are being raised through the Tranche 1 Issue, after deducting the Tranche 1 Issue related expenses to the extent payable by Company (“Net Proceeds”), towards funding the following objects (collectively, referred to herein as the “Objects”): For the purpose of onward lending, financing, and for repayment/ prepayment of interest and principal of existing borrowings of the Company; and general corporate purposes. The Company shall not undertake any public issuance of debt securities under any shelf prospectus or prospectus other than through one or more Tranche Prospectuses under this Shelf Prospectus dated August 25, 2016, in the current financial year.
The NCDs offered through this Shelf Prospectus and Tranche 1 Prospectus are proposed to be listed on the National Stock Exchange of India Limited (“NSE”) and BSE Limited (“BSE”). The Lead Managers to the Issue are YES Securities (India) Limited , Edelweiss Financial Services Limited, Axis Bank Limited, A. K. Capital Services Limited, ICICI Bank Limited, IndusInd Bank Limited, IIFL Holdings Limited, SBI Capital Markets Limited and Trust Investment Advisors Private Limited.
