Shriram City Union Rs 750 crore NCD offer opens tomorrow

NEW DELHI: Non-banking finance company Shriram City Union Finance (SCUF) today said it will raise up to Rs 750 crore through a non -convertible debenture ( NCD) issue which opens for subscription tomorrow.

The issue will let investors choose between the three years and five years tenor options and will carry a coupon rate of up to 12.10 per cent per annum.

The basic objective of the issue, which is open for subscription till August 27, is to raise Rs 375 crore, while the company has a green-shoe option to retain over subscriptions of an equal amount.

The South-based company plans to use the proceeds of the issue in regular financing business and repaying debt.

Incorporated in 1986, SCUF is in lending to small enterprises requiring loans of up to Rs 10 lakh and is also present in other segments like two-wheeler finance, loans against gold and existing two-wheelers, and financing white goods.

The company plans to list the NCDs on both the Bombay Stock Exchange and National Stock Exchange from the beginning itself so that investors get the liquidity.

SCUF is a part of the Shriram Group that grew out of a chit fund business and Sriram said its database of over 7 million customers is very important in SCUF's growth trajectory.

SCUF had clocked a 47 per cent growth in net profit in FY11 at Rs 241 crore.