Kosamattam Finance NCD January 2024 Public Issue Details

Kosamattam Finance Limited is set to launch its Non-Convertible Debentures (NCDs) offering from January 1, 2024, to January 12, 2024, with an initial base size of Rs 100 crore and a shelf size of Rs 200 crore. The NCDs are secured, redeemable, and non-convertible, featuring a face value of Rs 1000 each and an issue price of Rs 1000 per NCD. Investors can participate with a minimum lot size of 10 NCDs, and the market lot is set at 1 NCD. The series spans tenors of 18, 24, 30, 36, 39, 48, 54, and 88 months, offering flexibility to investors. The NCDs will be listed on the BSE, and the payment frequency options include both monthly and cumulative modes. The issue operates on a first-come, first-serve basis.

Kosamattam Finance Limited’s NCD offering comes with a credit rating of IND A-/Stable assigned by India Ratings, reflecting the company’s stable financial position and creditworthiness. This offering provides investors with an opportunity to diversify their portfolios across different tenors and series, while the secured nature of the debentures adds an additional layer of safety. The monthly and cumulative payment frequencies cater to varying investor preferences, and the trust placed in Vistra Itcl India Limited as the Debenture Trustee enhances the overall credibility of the NCD issuance.

NCD Coupon Rates

Objective of the Issue

It will spend Rs 1.60 crore for this entire issue proceeds. From the net proceeds, the company will use for the purpose of onward lending (at least 40%) and repayment of interest and principal of existing loans (up to 35%) as well as general corpus fund need (maximum up to 25%).

Credit Rating

This issue is rated as IND A-/Stable by India Ratings I& Research Pvt. Ld., this rating indicates that instruments with this rating are considered to have an adequate degree of safety regarding the timely servicing of financial obligations.

Financials of the Company

Over the past four fiscal years, KFL has demonstrated consistent growth in total income, posting figures of Rs 499.33 crore (FY20), Rs 541.84 crore (FY21), Rs. 624.79 crore (FY22), and Rs 782.54 crore (FY23). The first half of FY24, ending on September 30, 2023, witnessed a total income of Rs 413.70 crore

In terms of net profits, KFL has exhibited commendable financial results, recording figures of Rs 47.66 crore (FY20), Rs. 65.25 crore (FY21), Rs. 80.00 crore (FY22), and Rs. 107.05 crore (FY23). For the first half of FY24, it achieved a net profit of Rs. 57.66 crore, indicating a positive trend in the company’s bottom line. The net profit margin for this period stood at 13.97%, highlighting the efficiency and profitability of KFL’s operations.

KFL’s net NPAs have shown a decline, reducing from 0.86% in FY21 to 0.68% as of FY23. As of September 30, 2023, the company’s current paid-up equity capital is Rs 222.14 crore, supported by free reserves totalling Rs 625.84 crore Furthermore, KFL’s debt-equity ratio, as of September 30, 2023, is 6.00 and is expected to increase to 6.24 post the upcoming debt issue.

About company

Kosamattam Finance Ltd. (KFL) is a non-deposit taking NBFC – Middle Layer primarily engaged in the Gold Loan business, lending money against the pledge of household jewellery (“Gold Loans”) in the state of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Delhi, Maharashtra, Gujarat, Uttar Pradesh and Telangana along with the Union Territory of Puducherry.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.