JM Financial set to raise Rs 1,250 crore via retail bonds
Publish on : 2018-11-26 13:27:16
MUMBAI: JM FinancialNSE 2.02 % Credit Solutions (JMFL), a non-banking finance arm of JM Fin Group, will
raise up to Rs 1,250 crore through retail bond sale, indicating that investors are likely to regain confidence in the
The company, which lends to real estate builders, will offer rates in the range of 9.67% and 10.25% across
maturities. There are a set of three maturities, including three and a half-year, five-year, and 10-year. The bond
sale will open for subscription on Nov 20.
“We plan to use the proceeds both for expanding loans and debt repayments besides general corporate
purposes,” said Shashwat Belapurkar, CEO, JM Financial Credit Solutions, confirming the matter. “We aim to
reduce our share of short-term borrowing by the end of this year.”
He also said that the company is focusing on technology to manage and grow its business.
Rating companies, India Ratings and ICRANSE 0.23 %, have rated the issuance as AA grade with a stable
The company has marked Rs 250 crore as the base size of the issue while the rest could be mopped up through
oversubscription. EdelweissNSE 0.92 % Fin along with few others are helping the company to sell the bonds.
The share of commercial papers is now at about 20% of the company’s total liabilities. JM has planned to cut it to
12-15% by December-end.
Last month, former chief executive officer of CitiGroup Vikram Pandit, along with JM Group and others have
reportedly invested Rs 875 crore in JM Financial Credit Solutions.
The company’s loan book now stood at Rs 8,738 crore in the first half (April-September) of the financial year.
Residential projects have contributed nearly three-fourth to the loan book.
In the past two months, non-banking finance companies have been finding it tough to raise money from debt
capital market as investors turned apprehensive following a series of defaults by infrastructure conglomerate
Improvement in JMFL’s credit profile while maintaining the importance of the lending business, along with
portfolio seasoning and less concentrated portfolio while maintaining strength in capital market-related
businesses, could result in a positive rating action, India Ratings said in a report.
The company’s debt to equity ratio, a measure of a company’s indebtedness, is now at 2.5, compared with 3.5 at
the beginning of the financial year.
Any weakness in JMFL’s credit profile, which, among other factors, could result from dilution of the capital buffers
or from inadequate liquidity buffers, may result in a negative rating action, the rating company had cautioned in a
report in April.
Source :- Economic Times