The issue has so far garnered Rs 835 cr against total size of Rs 1,050 cr
India Infoline Finance (IIFL) has said it will close its Rs 1,050 crore-non-convertible debenture (NCD) offering today, much ahead of its scheduled closing date of October 4.
The IIFL NCD, which had opened for subscription on September 17, has so far mopped up around Rs 835 crore, stock exchanges data show.
The company needs a little over Rs 200 crore on the last day to ensure that the issue gets fully covered. The aggregate issue size is Rs 1,050 crore, of which half is the green shoe option.
Sources said the decision to close the issue prematurely was taken following RBI’s move to hike interest rates.
The central bank on Friday raised the repo rate by 25 basis points, which saw yields on the 10-year benchmark government security harden by over 40 basis points. Barring the short-term paper, yields across the board have hardened on concerns of further rate increases to calm inflation.
“The interest rate outlook has turned bearish, which could have impacted the incremental subscription for the issue. Also, as yields harden there was also a risk of few investors withdrawing their applications,” said a source.
If the interest rates increase further the IIFL NCDs could list at a discount to their issue price, resulting into notional losses for investors.
The IIFL offering, however, has seen strong response from retail investors who were attracted towards the monthly payment feature. Bulk of subscriptions for the NCD has opted for the monthly interest payment option, where the effective yield works out to 12.68% as against 12% for the annual interest payment option.
India Infoline Finance (IIFL) has said it will close its Rs 1,050 crore-non-convertible debenture (NCD) offering today, much ahead of its scheduled closing date of October 4.
The IIFL NCD, which had opened for subscription on September 17, has so far mopped up around Rs 835 crore, stock exchanges data show.
The company needs a little over Rs 200 crore on the last day to ensure that the issue gets fully covered. The aggregate issue size is Rs 1,050 crore, of which half is the green shoe option.
Sources said the decision to close the issue prematurely was taken following RBI’s move to hike interest rates.
The central bank on Friday raised the repo rate by 25 basis points, which saw yields on the 10-year benchmark government security harden by over 40 basis points. Barring the short-term paper, yields across the board have hardened on concerns of further rate increases to calm inflation.
“The interest rate outlook has turned bearish, which could have impacted the incremental subscription for the issue. Also, as yields harden there was also a risk of few investors withdrawing their applications,” said a source.
If the interest rates increase further the IIFL NCDs could list at a discount to their issue price, resulting into notional losses for investors.
The IIFL offering, however, has seen strong response from retail investors who were attracted towards the monthly payment feature. Bulk of subscriptions for the NCD has opted for the monthly interest payment option, where the effective yield works out to 12.68% as against 12% for the annual interest payment option.
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