Aditya Birla Finance NCD opens tomorrow: Offers High 8.10% Interest, Backed by AAA Rating

Aditya Birla Finance Limited (ABFL), a subsidiary of Aditya Birla Capital Limited, has announced its first public issue of Non Convertible Debentures (NCDs) for an amount up to Rs 1,000 crore with an option to retain oversubscription up to Rs 1,000 crore, for an aggregate amount of up to Rs 2,000 crore.

Coupon rates range from 8.00% p.a. to 8.10% p.a. for annual options with effective yields ranging from 7.99% p.a. to 8.09% p.a. across various series. NCDs with tenor options of 3 years, 5 years or 10 years are offered with monthly, annual or ‘cumulative interest payment frequency and the allotment on first-come-first-serve basis.

The NCD offers an opportunity to earn 50-100 basis points higher interest rate compared to leading banks and other AAA-rated products. SBI offers between 6.5% and 7% for fixed deposits of tenure ranging from 3 to 10 years.

The issue will open on Wednesday, September 27, 2023, and close on Thursday, October 12, 2023, with an option of early closure of the issue on such date, as may be decided by the Board of Directors of the company or a duly authorized committee thereof.  The minimum application size is fixed at Rs 10,000 (10 NCDs) across all series collectively and in multiples of Rs 1,000 thereafter.

The Company proposes to utilise at least 75% of the net proceeds of the issue towards onward lending, financing and repayment of interest and principal of existing borrowings of the company and a maximum of up to 25% of the net proceeds towards general corporate purposes.

The NCDs have been rated IND AAA Outlook Stable and rated [ICRA] AAA (Stable) by India Ratings & Research Private Limited and by ICRA Limited, respectively. The rating reflects the highest degree of safety regarding timely servicing of financial obligations and carry the lowest credit risk.

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Trust Investment Advisors Private Limited, A.K. Capital Services Limited, JM Financial Limited, and Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited) are the lead managers to the Issue.

ABFL is registered with the RBI as a non-deposit taking systemically important non-banking financial company. ABFL have been categorized as an ‘Upper Layer’ NBFC under the scale based regulatory framework for NBFCs introduced by the RBI, with effect from September 30, 2022. ABFL offers end-to-end lending, financing and wealth services to retail, HNI, ultra HNI, micro, small and medium enterprises, small and medium enterprises and corporate customers and offers customized solutions in areas of personal and business loans, corporate finance, mortgages, personal loans, business loans, check-out financing, loan against property, term loans, working capital loans, loans against securities, project loans and wealth services.

As of June 30, ABFL had total loans outstanding of Rs 85,778.5 crore and a total asset under management of Rs 85,891.2 crore.