Aditya Birla Finance Limited NCD Public Issue September 2023 Review
Aditya Birla Finance Limited is coming up with a public NCD issuance and have filed the prospectus on SEBI. Let’s understand the profile of Aditya Birla Finance Limited & its group.
|Issuer||Aditya Birla Finance Limited|
|Type of Instrument||Secured, Rated, Listed, Redeemable, Non-Convertible Debentures|
|Issue Size||Rs. 1,000 Crs (Base Issue) + Rs. 1,000 Crs (Green Shoe Option)|
|Face Value||Rs. 1,000|
|Tenure||3 years to 10 years across Series I-VI|
|Yield||7.99% to 8.09% across Series I-VI|
|Application size||Minimum Rs. 10,000/- (10 NCDs) and in multiples of 1 NCD thereafter|
|Security Cover||Minimum 100% security cover on the principal outstanding plus accrued interest thereon|
|Credit Rating||IND AAA/Stable & ICRA AAA/Stable|
|Issue Open Date||27-Sep-23|
|Issue Close Date||12-Oct-23|
Specified terms of the NCDs are as follows:
|Series I||Series II||Series III*||Series IV||Series V||Series VI|
|Frequency of Interest Payment||Annual||Cumulative||Annual||Cumulative||Monthly||Annual|
|Nature of Instruments||Secured NCDs|
|Tenor||3 years||3 years||5 years||5 years||10 years||10 years|
|Coupon (% per Annum)||8.00%||NA||8.05%||NA||7.80%||8.10%|
|Effective Yield (% per Annum)||7.99%||7.99%||8.04%||8.04%||8.08%||8.09%|
|Amount on Maturity (Rs.)||1,000.00||1,259.46||1,000.00||1,472.73||1,000.00||1,000.00|
The Company shall allocate and allot Series III NCDs wherein the Applicants have not indicated the choice of relevant NCD Series.
About Aditya Birla Finance Limited
ABFL (the “Company”), a wholly owned subsidiary of Aditya Birla Capital Limited, is among the leading well-diversified NBFC in India. ABFL is a Systemically Important Non-Banking Financial Company not accepting public deposits (“NBFC-ND-SI”) registered with the Reserve Bank of India (“the RBI”) under section 45-IA of the Reserve Bank of India Act, 1934 and primarily engaged in offering end-to-end lending, financing, and wealth services to retail, HNI, ultra HNI, micro, small and medium enterprises (“MSME”), small and medium enterprises (“SME”) and corporate customers.
The Company offers customized solutions in areas of personal and business loans, corporate finance, mortgages, check-out financing, loans against property, term loans, working capital loans, loans against securities, project loans and wealth services. The company obtained a fresh certificate of registration bearing number N-01.00500 dated August 9, 2011, issued by the RBI to carry on the business of NBFC.
ABFL is amongst the top five largest private diversified NBFCs in India based on AUM. The AUM and total loans outstanding of the Company stood at ₹ 85,891.20 Crore and ₹ 85,778.50 Crore, respectively as on June 30, 2023. The Company employees 5,240 people as of June 30, 2023.
Aditya Birla Capital Limited was originally incorporated as ‘Aditya Birla Financial Servies Private Limited’ on October 15, 2007. After being converted to a public company on December 4, 2014, its name was changed to Aditya Birla Capital Limited on June 21, 2017.
Aditya Birla Capital Limited (“ABCL”) is a financial solutions group that caters to the diverse needs of its customers across their life cycle. With subsidiaries/JVs that have a strong presence across Protecting, Investing and Financial Solutions, ABCL is powered by more than 38,000 employees with a nationwide reach through 1,331 branches and more than 2,00,000 agents/channels. As of June 30, 2023, ABCL manages aggregate AUM of about ₹ 3.9 lakh Crore with a consolidated lending book of over ₹ 1 lakh Crore through its NBFC and HFC arm while the remaining ₹ 2.9 lakh Crore contributed through its AMC and Insurance Business arm.
Aditya Birla Capital Limited is a part of the global conglomerate Aditya Birla Group, which is in the league of Fortune 500. The Aditya Birla Group is anchored by an extraordinary force of over 1,85,000 employees belonging to 100 nationalities. The group, with over seven decades of business existence, has grown into a global powerhouse in a wide range of sectors- metals, pulp and fibre, chemicals, textiles, carbon black, telecom, cement, financial services, fashion retail, and renewable energy.
The Corporate Structure of the Group is shown below:
The diverse products offered by ABFL are classified under the four categories as follows:
|Corporate/Mid-Market Category (30.78%)||Secured Business Category (38.64%)||Unsecured Business Category (9.98%)||Personal and Consumer Category (20.60%)|
|Products||1.Capex/working capital funding|
|1.Loans against Property|
2.Working Capital Loans
3.Lease rental discounting
4.Loans against securities
2.Supply Chain Finance
3.B2B Digital Platform (Udyog Plus)
|Customers (As at June 30, 2023)||484||18,314||82,642||58,13,064|
|Geographic Presence||Top 6-7 Cities in India||Semi-urban areas/SME clusters||Semi-urban areas||Semi-urban areas|
|Target Customers||Corporates across various sectors||Business owners and self-employed professionals in small/mid-sized businesses||SMEs and MSMEs||Individuals, small business owners, micro enterprises|
As of June 30, 2023, the company enjoys a geographical footprint with 332 branches spread across 297 cities with a focused expansion in Tier III and Tier IV cities and a customer base of 59,14,504. The distribution of branches across the zones is depicted below:
|AUM (₹ in Cr)||85,891.2||80,555.5||55,180.0||48,688.6|
|Net Worth (₹ in Cr)||12,050.8||11,530.7||9,968.9||8,965.9|
|PAT (₹ in Cr)||515.7||1,553.8||1,108.3||768.8|
The Product-wise AUM split is as follows:
|Product Category||Q1 FY24||FY23||FY22||FY21|
|Personal and Consumer||17,692.8||15,441.8||5,208.4||2,664.7|
|Rating||AAA (Stable)||AAA (Stable)||AAA (Stable)||AAA (Stable)|
Borrowings of the Company
As of 30th June 2023, company has total o/s debt of ₹ 75,476.00 Crore, as follows:
|Nature of Borrowings||O/s Amount||% Share|
|Type of Borrowings||O/s Amount||% Share|
|External Commercial Borrowings||2,324.10||3.08%|
|Unsecured Perpetual and Partly Paid NCDs||379.70||0.50%|
Peer Comparison*: As of 30th June 2023
|Attributes||Aditya Birla Finance||Bajaj Finance||L&T Finance Holdings|
|AUM (₹ in Cr)||85,891.20||2,70,097.00||78,566.00|
|Net Worth (₹ in Cr)||12,050.80||57,994.07||22,072.00|
|PAT (₹ in Cr)||515.70||3,436.89||531.00|
*According to the prospectus, Bajaj Finance and L&T Finance Holdings are among the primary competitors of ABFL.
- Strong ultimate parentage of Grasim and diversified financial services group.
- Key Management Personnel with vast experience in the financial services domain.
- Good financial flexibility and diversified funding profile.
- Improving Profitability.
- The Company’s ability to manage its credit costs with a change in book towards unsecured segment remains a key monitorable.
- ABFL’s asset quality remains exposed to slippages from unsecured segments.
- There has been a decrease in CRAR over the past years with the leverage being high at 6.32.
Source of data: Prospectus, Annual Report, Rating Rationale, Quarterly results, etc.