High Yield | BBB/Stable Rated | Minimum Investment: 10k Only
Bond overview
Sakthi Finance Limited is issuing the Non-Convertible Debentures. These NCDs are BBB/Stable rated by ICRA. The NCDs are being issued in seven series: coupon ranges from 9% to 10.25% p.a. and different tenures of 24 months, 36 months, 60 months and 85 months. The NCDs are secured and redeemable in nature.
Coupon rates and effective yield for each of the series
Allocation Ratio
The allocation ratio is prepared based on norms laid down by SEBI. Before announcing the allocation ratio, the same has to be approved by SEBI. Once the IPO subscription closes, applications will be divided into different categories. The category-wise allocation ratio is always decided and declared during the launch of the particular IPO. Considering the Allocation Ratio, units will be assigned to applicants. Refer to the chart to know the application ratio for Sakthi Finance Limited NCD-IPO.
Investment Process for Sakthi Finance Limited NCD IPO
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If the investment amount is less than & up to 10 lakhs, retail investors can apply for an IPO online.
If the investment amount is more than 10 Lakhs.
Financial Overview
Snapshot stating the Revenue, Expenses, PAT (In crores)
Cash flow for last 5 years (In crores)
Cash flow refers to the movement of cash in and out of the business at a specific point in time. It represents the net balance of the cash movement.
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- *Cash flow from operating activities reflects the amount a company generates through its product of services.
- **Cash flow from investing activities reflects cash generated and spent relating to investing activities, like purchase of assets, sales of securities etc.
- ***Cash flow from financing activities gives an insight into the financial stability of a company to its investors. It reflects the net flows of cash that are used to fund the company.
Ratio Analysis
Issue analysis
Pros
- The NCD is BBB rated security with a stable outlook.
- The yield offered is 14.3% which is much higher than FDs.
Cons
- The operations of NBFC is geographically constrained. It is 95% operated in South India.
To get better returns than Bank FDs, invest in NCD-IPOs online.
About Sakthi Finance Limited
Established in 1955, Sakthi Finance Limited (SFL) is a seasoned player in the regional vehicle finance scene. Backed by the diverse Sakthi Group, SFL primarily focuses on financing commercial vehicles (CVs), forming 90% of its portfolio as of September 2023. Beyond CVs, they delve into car loans, construction equipment financing, and other machinery loans. Operating primarily in Tamil Nadu and Kerala, SFL holds a strong 95% market share in these two southern Indian states.
H1 FY2024
Strengths
- Strong regional experience: Over 60 years in vehicle finance across 4 South Indian states.
- Proven fundraising ability: Raised Rs. 666 crore in recent years with strong retail investor participation.
- Adequate capital buffer: Gearing ratio within industry norms, supporting growth plans.
Weakness
- Regional concentration: 95% of portfolio in Tamil Nadu and Kerala, limiting geographic diversification.
- Moderate growth: Portfolio growth slowed in FY2023, though it picked up in H1 FY2024.
- Subdued profitability: Profit margins historically low, showing modest improvement recently.
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Source- Prospectus January 30, 2024
Disclaimer – The information is published as on date 11/10/2023 based on information available on Prospectus January 30, 2024. The information may be subject to change in case of change in terms of prospectus or any other reason as the case maybe. Contents which are exclusively for educational information/knowledge sharing on capital market concepts and has no influence the investment/sale decisions of any investors
