INSUBCONTINENT EXCLUSIVE:
Mumbai: ECL Finance, the non-banking arm of the Edelweiss group, is raising Rs 2,000 crore by selling retail bonds amid expanding credit
The company aims to lend more to small businesses and the housing sector.
Those debt papers, known as non-convertible debentures in market
parlance, will offer interest rates in the range of 9.45-9.85% with three-, five- and 10-year maturities
The bonds will open for subscription Tuesday.
"Three-fourths of the money raised will be spent on servicing existing debts, and expanding
retail, loan-against-property, mortgage and SME (loans)," Edelweiss Financial chief financial officer S Ranganathan said.
The core issue is
Rs 500 crore, but the company can retain oversubscription up to another Rs 1,500 crore.
Ratings companies Crisil and ICRA have rated the
bonds AA, with stable outlook.
"Interest rates may be rising, but we have managed to borrow cheap and diversify our funding sources," said
Ranganathan.
The Reserve Bank of India raised the policy rate by a quarter percentage point for the first time in about four-and-a-half
years.
This has increased borrowing cost in the market
For ECL Finance, it is now at 9.8%, 10 basis points higher than last financial year
A basis point is one hundredth of a percentage point.
The company expanded loans by 29% to Rs 22,000 crore in the financial year ended March
Its gross bad loan ratio improved a tad to 1.82% last financial year from 1.85% the year before.
