Financial services firm Vivriti Capital on Wednesday said it will raise ₹500 crore through the issuance of non-convertible debentures (NCDs), which will be used for lending, financing and for repayment of interest and principal of existing borrowings of the company. The public issue of the Chennai-based firm, which offers lending products to mid-sized corporates, includes a base issue size of up to ₹250 crore and a green shoe option of up to ₹250 crore.

The public issue of secured, rated, listed, redeemable non-convertible debentures (NCDs) will open on August 18, 2023, and close on August 31, 2023, with an option of early closure. The NCDs will be listed on the Bombay Stock Exchange (BSE). The public issue is reserved up to 20% for qualified institutional buyers (QIBs) and remaining 80% for non-institutional investors (NIIs).

The face value of NCD is ₹1,000 each and the minimum application size is 10 NCDs across all series collectively and multiples of 1 NCD thereafter. This means, the minimum application amount would be ₹10,000 across all series collectively and in multiples of ₹1,000 thereafter.

As per the company, up to 75% of the total amount will be used towards onward lending, financing and for repayment of interest and principal of existing borrowings of the company and maximum up to 25% to meet general purpose expenses.

Speaking to Fortune India, Vineet Sukumar, Founder & Managing Director, Vivriti Capital, says, "The maiden public issue of NCDs is a milestone in our growth journey. Our clients comprise of mid-market enterprises that have made a huge contribution to our nation's GDP. Vivriti Capital offers innovative lending solutions to help unleash their growth potential further.”

On competition in NBFC sector, he says, “If you look at the NBFC space in more detail, the competition is much higher in following areas: home loans, auto and CV loans, MSME, Micro finance, gold loans and consumer loans. Most of the large listed players are in one of these 6 segments. So the competition is there in these segments and less so in ours.”

Speaking on funding winter, Sukumar reveals some parts of the market are facing funding constrains, but Vivriti “is relatively not impacted”. “While an economic slowdown in some part of the markets always affect other parts, but effect on us is very limited, because we are in the business of lending to mature companies and not lending to startups. Therefore some parts of the market are affected by the funding winter, but we are not affected because we are not into that market. Our GNPA has come down from 0.5% to 0.3% over FY 22 to FY 23.”

Formed in June 2017, Vivriti Capital is registered with the RBI as a non-deposit taking systemically important non-banking financial company (NBFC-ND-SI). Backed by marquee institutional investors such as the Creation Investments, Lightrock and TVS Capital, Vivriti offers lending products to mid-corporates, including term loans, working capital demand loans, co-lending with financial partners, securitisation of receivables, direct assignment of receivables, supply chain finance and subscription to bonds and commercial paper.

The company manages portfolio of ₹5,835.80 crore, and has provided debt solutions to over 194 mid-corporates across various sectors. It focuses on ticket size of loans ranging from ₹0.10 lakh to ₹80 crore with average ticket size of less than ₹3.5 crore. As of March 31, 2023, the company had total outstanding loan assets of ₹4,508.73 crore and investments in bonds, securitisations and commercial paper of ₹1,327.06 crore.

The proposed NCDs' are rated ‘[ICRA] A (Stable)’ and ‘CARE A+’ by ICRA and CARE Ratings, respectively. The issue comprises Series I to Series V with different tenure of interest payment and coupon rates. Series I has a tenor of 18 months and coupon rate of 9.57% per annum (payable monthly) and an effective yield of 9.98% per annum.

The proposed NCDs' are rated ‘[ICRA] A (Stable)’ and ‘CARE A+’ by ICRA and CARE Ratings, respectively. The issue comprises Series I to Series V with different tenure of interest payment and coupon rates. Series I has a tenor of 18 months and coupon rate of 9.57% per annum (payable monthly) and an effective yield of 9.98% per annum.

Series II has a tenor of 18 months and coupon rate of 10% per annum (payable annually) and an effective yield of 10.06% per annum.

Series III has a tenor of 24 months and coupon rate of 9.65% per annum (paid on a quarterly basis) and an effective yield of 9.98% per annum.

Series IV has a tenor of 24 months and coupon rate of 10.03% per annum (payable monthly) and an effective yield of 10.49% per annum.

Series V has a tenor of 24 months and coupon rate of 10.5% per annum (payable annual) and an effective yield of 10.48% per annum.

JM Financial Limited is the lead manager to the issue and the BSE is the designated stock exchange for the issue.

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