The Non-Convertible Debentures are released by CreditAccess Grameen Limited. The IND rates these NCDs as AA- Stable. The NCDs are issued in eight series, with coupon rates ranging from 9.1% to 9.7% per annum and maturities of 24, 33, 50, and 60 months. The NCDs are safe and can be redeemed. The issue opening date is August 24, 2023, and the closing date is September 6, 2023.
| Issue Open | Aug 24, 2023 – Sep 6, 2023, |
| Security Name | CreditAccess Grameen Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | Rs 1,000.00 Crores |
| Issue Size (Shelf) | Rs 1,500.00 Crores |
| Issue Price | Rs 1000 per NCD |
| Face Value | Rs 1000 each NCD |
| Minimum Lot Size | 10 NCD |
| Market Lot | 1 NCD |
| Listing At | BSE, NSE |
| Credit Rating | IND AA-/Stable |
| Tenor | 24, 33 and 60 months |
| Series | Series I to VIII |
| Payment Frequency | Monthly and Cumulative |
| Basis of Allotment | First Come, First Serve Basis |
| Debenture Trustee/s | Catalyst Trusteeship Limited |
About CreditAccess Grameen Limited (CAGL)
CreditAccess Grameen Limited is a prominent microfinance institution based in Bengaluru, India. According to MFIN India, as of March 2023, the company had the largest NBFC-MFI total loan portfolio in India. The company has been able to accomplish high customer retention rates and low credit costs as a result of its customer-centric business model, diverse product offerings, and well-designed product delivery and collection systems. The company focuses primarily on rural clients in India, who lack access to the formal banking sector and represent an untapped market for micro-lending.
CAGL offers micro-loans and other financial products to help individuals and small businesses meet their financial needs, such as starting or expanding a small business, improving living conditions, or covering emergency expenses. Microfinance institutions like CreditAccess Grameen are vital in promoting financial inclusion and empowering underserved communities by providing access to credit and other financial services.
By June 30, 2023, the business had 1,826 branches and 17,391 employees serving 44.2 lakhs active solidified customers across 353 districts in 14 Indian states (Tamil Nadu, Kerala, Karnataka, West Bengal, Maharashtra, Madhya Pradesh, Odisha, Chhattisgarh, Jharkhand, Gujarat, Goa, Rajasthan, Uttar Pradesh, and Bihar).
Business Verticals –
- Microfinance
- Retail Finance Loan for Income Generation
- Grameen Vikas Loan Loan for Home Improvements
- Gruha Vikas Loan Loan for Family Welfare
- Grameen Savaari Loan Urgent Cash Advance
- Unnati Loan Grameen Suvidha Loan
Company Promoters
The organization’s promoter is CreditAccess India N.V.
Company Strengths
- Largest NBFC in Microfinance institutions, with rural consumers comprising nearly 85 per cent of its total clientele.
- The company’s solid liquidity position is supported by the robust monthly collections observed over the past few months.
- The company’s efficient risk management is demonstrated by the low GNPA rates (3.1% as of FY2022), which are backed by substantial provisioning coverage.
- In FY2023, CreditAccess Grameen’s portfolio is anticipated to increase by 25% annually.
Company Weakness
70% of the entire loan portfolio was regionally concentrated in Karnataka, Maharashtra, and Tamil Nadu.
Objectives of the Issue
The specifications of the Tranche II Issue and the amount proposed to be financed from net proceeds are as follows:
- For further financing, lending, interest, and principal repayment on the company’s existing debt.
- Other general corporate purposes.
Ratio of Allocation
The allocation ratio is determined in accordance with SEBI regulations. SEBI must authorise the allocation ratio before it can be announced. After the subscription period for the IPO concludes, applications will be divided into distinct categories. The category-by-category allocation ratio is always determined and announced during the IPO’s launch. In consideration of the Allocation Ratio, applicants will be assigned units. Refer to the graph below for the CreditAccess Grameen Limited NCD-IPO application rate.
Issue Evaluation
Pros
- The NCD is a security-rated AA- with a secure outlook.
- The coupon rate ranges from 9.1% to 9.7%, which is significantly higher than FDs.
Cons
- The decreasing Interest Coverage ratio indicates that the company may not be able to cover its interest payments with its operating income.
- Cash flow to debt is declining significantly, indicating that the NBFC may not be able to meet its debt obligations using operating cash flows.
NCD Ratings
India Ratings & Research Private Limited has assigned a rating of IND AA-/Stable to the proposed issuance of Rs 1,500 crores in NCDs.
Financial Performance
CreditAccess Grameen Limited has reported consolidated total income/net profits of Rs. 2,466.07 crore/Rs. 131.40 crore (FY21), Rs. 2,750.13 crore/Rs. 353.07 crore (FY22), and Rs. 3,550.79 crore/Rs 826.06 (FY23) over the past three fiscal years. The company’s upper and bottom tiers exhibit a rising profit trend.
How do I apply on the BondsIndia website?
Apply fast by following the instructions below:
- Select the series under Public Issue Bonds,
- Complete PAN and Demat account details,
- Enter your UPI number,
- Approve the payment mandate,
Also Read: 8 Things to Check Before Investing in IPOs
To Sum Up,
CreditAccess Grameen Limited, founded in 1993 as an NGO, was transformed into an NBFC in 2007-08 under the direction of Mrs Vinatha M Reddy. CreditAccess India acquired a 74% majority stake in this company during the 2014 fiscal year. The corporation is India’s largest NBFC-MFI (Micro Finance Institution), headquartered in Bangalore.
CreditAccess Grameen Limited (CAGL) is an India-based microfinance institution. It focuses predominantly on providing financial services to rural and semi-urban areas, targeting low-income individuals and households that may lack access to traditional banking services. “Grameen Koota” means “rural group” in Kannada, which is the company’s prominent name. IND has assigned CreditAccess Grameen Limited AA-/Stable ratings. However, well-informed individuals could investigate the impending NCD IPO and consider making investments for medium- to long-term returns.