MUMBAI (GPN): Arka Fincap Limited an NBFC – ML is registered with the RBI (A subsidary of Kirloskar Oil Engines Limited), announced today its maiden public issue of secured, rated, listed, redeemable non-convertible debentures of face value of ₹ 1,000 each (“NCDs” or “Debentures”) for an amount of ₹ 15,000 lakh (“Base Issue Size”) with an option to retain oversubscription up to an amount of ₹ 15,000 lakh (“Green Shoe Option”) amounting to ₹ 30,000 lakh (“Tranche I Issue Limit”) (“Tranche I Issue”).
The Key Higlights:-
- Effective yield of up to 9.99% per annum for Series VI
- Credit Rating: CRISIL AA-/Positive by CRISIL Ratings Limited
- Tranche I Issue opens on December 7, 2023 and closes on December 20, 2023 with an option for early closure as decided by the Board of Directors or Asset Liability Committee of the Company and subject to relevant approvals
- NCDs will be traded in dematerialised form
- Allotment on first cum first serve basis. However, from the date of oversubscription and thereafter, the allotments will be made to the applicants on proportionate basis.
- The loan book of Arka Fincap in March 2021 was of 112,433 lakhs, the company has grown to 403,319 lakhs in September 2023. The significant part of growth has been into MSME lending in Devember 2020, which now forms 36.19% of the loan book.
- The financial performance in FY23, with revenue of 37,066 lakhs and a net profit of 6,136 lakhs, is a testament to the commitment to financial prudence. The GNPAs at 0.19% and NNPAs at 0.05% as of September 2023, it reflects our focus on maintaining a healthy portfolio.
Arka Fincap Limited, a middle layer Non-Banking Financial Company (NBFC) and a subsidiary of Kirloskar Oil Engines Limited, aims to raise up to Rs 300 crore through a public offering of non-convertible debentures (NCDs) starting from December 7. The issue is scheduled to close on December 20.
The NCDs are divided into three maturity options of two years, three years, and five years. The effective yield offered to NCD holders ranges from 9 per cent to 10 per cent per annum. The NCDs have been given the credit rating of ‘AA-‘ with a ‘positive’ outlook by CRISIL.
The base issue size is set at Rs 150 crore, and there is a green shoe option that allows for an additional Rs 150 crore, bringing the total fundraising to Rs 300 crore, the company said in a release.
A minimum of 75 per cent of the funds generated from this Tranche I Issue will be allocated for onward lending, financing, and the repayment of interest and principal of the company’s existing borrowings. The remaining portion is earmarked for general corporate purposes, the release said.
Amit Gupta, group chief financial officer at Arka Fincap, said that the Reserve Bank of India’s stringent regulations on unsecured lending will result in a modest increase of 5-10 basis points in the cost of borrowing for the company. Gupta said that this marginal cost adjustment will be passed on to the customers.
Due to surging unsecured loans like personal loans and those on credit cards, the RBI increased the risk weighting for such loans from 100 per cent to 125 per cent. The risk weighting for bank loans to higher-rated NBFCs too was increased by 25 percentage points.Ends
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