Edelweiss Financial’s ₹400 crore NCD issue oversubscribed on retail demand

By Livemint
The NCD issue, which had opened for subscription on 17 August and closed on 6 September, had a base issue size of ₹200 crore with an option to retain oversubscription up to ₹200 crore, aggregating up to ₹400 crore.

NEW DELHI : Edelweiss Financial Services Ltd’s 400-crore non-convertible debenture (NCD) issue has been oversubscribed with the offer receiving more than 17,000 applications. The retail category was oversubscribed 1.74 times with a total collection of 279.11 crore.

The NCD issue, which had opened for subscription on 17 August and closed on 6 September, had a base issue size of 200 crore with an option to retain oversubscription up to 200 crore, aggregating up to 400 crore.

“We are delighted with the encouraging response to our NCD issue. The issue has been oversubscribed, which shows the faith that investors across categories have in our diversified model and the appetite for high quality financial papers that offer competitive interest rates," said Rashesh Shah, chairman and managing director, Edelweiss Financial Services.

According to the company, almost 50% of the total issue size got subscribed for five-year and 10-year tenure, as investors looked to subscribe for the long term.

The NCD issue saw interest from investors across series and tenures offering annual, monthly, and cumulative interest options with the effective annual yield ranging from 9.09% to 9.70%.

According to the company, the base issue saw oversubscription in all categories—qualified institutional buyer (QIB), corporate, high net-worth individuals (HNIs) and retail. However, only retail category was oversubscribed in the overall issue size.

There were eight series of NCDs carrying fixed coupon and having tenure of 36 months, 60 months and 120 months with annual, monthly and cumulative interest option. The effective annual yield for NCDs will range between 9.09% and 9.70%.

The NCDs were rated AA with a negative outlook by Acuite Ratings and Research and A+ with a negative outlook by ICRA Ltd. According to experts, these ratings mean that the debentures carry low credit risk but are not as safe as AAA-rated instruments.


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