Intime Properties Ltd raises Rs 340 crore by issue of NCDs

MUMBAI: Intime Properties Ltd, raised Rs340 crore by issue of non-convertible debentures to refinance its debt. In time Properties is part of the K Raheja Corp Group, a Mumbai based real estate developer. The NCDs issued are backed by commercial real estate office space owned by the company in Hyderabad.

The nine year paper with an early redemption option at the end of fourth and sixth year carries a coupon of 9.95 per cent. If the early redemption option is not exercised in the fourth year the coupon increases by 50 basis point to 10.45 per cent.

IDFC has underwritten the issue. This paper will now be marketed to insurance companies, bank treasuries and asset managers.

"Its an alternate financing option available to the corporate at competitive pricing. Its also helps the issuer diversify its lender base and reflects growing sophistication of Indian Debt Capital Markets" said Ajay Mahajan, head - financial markets group, IDFC Ltd.

A company by issue of such NCDs backed by real estate can give the issuer a cost advantage which could range from 50 to100 basis point over a bank loan. One basis point is equal to one hundredth of a percentage. The bank loan has to be priced over the base rate which is the minimum lending rate. The base rate of most banks hover in the range of 10 to 10.75 per cent.

These fixed rate NCDs, have been rated IND AAA(SO) by India Ratings.