Vivriti Capital Limited August 2023 NCD Public Issue Review
Vivriti Capital Limited has launched its public issue of NCDs to mobilise funds from the debt market. Read further to know more about the business of Vivriti Capital Limited.
|Issuer||Vivriti Capital Limited|
|Type of Instrument||Listed, Secured, Redeemable, Non-Convertible Debentures|
|Issue Size||Rs. 250 crs + Rs. 250 crs (Green shoe option)|
|Face Value||Rs. 1,000 each|
|Tenure||18 months to 24 months|
|Yield||9.98% to 10.49%|
|Application size||Minimum 10 NCDs and in multiples of 1 NCD thereafter|
|Security Cover||Minimum 100% security cover of the principal outstanding plus interest thereon|
|Credit Rating||CARE A/Positive and ICRA A/Stable|
|Issue Open Date||18-August-23|
|Issue Close Date||31-August-23|
Specified terms of the NCD’s are as follows*:
*All the above NCD’s are secured and do not have an enabling call or put option.
About the Vivriti Capital Limited
Previously known as Vivriti Capital Private Limited, Vivriti Capital Limited (“VCL”) was incorporated in 2017 by Mr. Vineet Sukumar and Mr. Gaurav Kumar. VCL is registered as an NBFC-ND-SI and is the parent company of Vivriti Asset Management Private Limited and CredAvenue Private Limited. The company on a standalone basis is primarily engaged in offering lending products to mid-corporates which includes products like term loans, working capital demand loans, co-lending with financial partners, securitisation of receivables, direct assignment of receivables, supply chain finance and subscription to bonds and commercial paper. The target segment of the company comprises of entities which are either unrated or have ratings that do not permit them to have easy access to banking finance, and primarily hailing from urban/ semi-urban areas.
About the Group
Over the years, the Vivriti group has established its presence in mid-market lending by enabling debt to hundreds of mid-market enterprises across the country. The group is comprised of 7 subsidiaries as of March 31, 2023. The revenue from operation of the company was ₹ 688.08 crs for the year March 31, 2023, and ₹ 404.97 crs for the year March 31, 2022, on a consolidated basis. The company earned profit of ₹ (121.70) crs for the year ended March 31, 2023, and ₹ 1,553.27 crs for the year ended March 31, 2022, on a consolidated basis. The profit is after the consideration of loss on account of ‘share of loss equity from associate’ amounting to ₹ (256.59) crs for the year ended March 31, 2023 and gain due to dilution of control amounting to ₹ 2,007 crs for the year ended March 31, 2022.
VCL is promoted by Mr. Vineet Sukumar (Ex-Northern Arc) and Mr. Gaurav Kumar (Ex-Northern Arc) and holds 6.83% and 6.72% of equity respectively on diluted basis. The company is also backed by foreign VC’s like Lightrock and AIF’s like TVS Shriram. The holding of Vivriti group is described in the chart below:
History of Vivriti Capital Limited
Vivriti Capital Limited was incorporated on June 22, 2017, under the name Vivriti Capital Private Limited. With effect from June 09, 2023, the company has converted itself from private company to public company (“Vivriti Capital Limited”).
Vivriti group operates through various entities offering a bouquet of products including loans, wealth management, technology etc. Following table provides a brief understanding of the entities and their businesses:
|Vivriti Capital Limited||Term loans and Working capital loan||June 2017|
|Vivriti Asset Management Private Limited||AIF||February 2019|
|CredAvenue Private Limited||Technology for debt market||August 2020|
|CredAvenue Securities Private Limited||Auxiliary financial services||June 2021|
|Spocto Solutions Private Limited||Digital debt collection technology||February 2020|
|Finfort Infotech LLP||Data aggregation and credit underwriting technology||May 2016|
|Bluevine Technologies Private Limited||Operates – “corpository.com”||October 2015|
|CredAvenue Spocto Technology Limited||Foreign subsidiary|
Financial Performance (at consolidated level)
|Debt to Equity||1.70||1.21||1.78|
* Debt equity = (Borrowings – Bank Overdraft – Unamortised expense) / Equity (including preference). **The loss for Mar 2023 includes loss incurred due to share of loss of equity from associate amounting to ₹ 257 crs. The profit for Mar 22 includes profit on dilution of control amounting to ₹ 2,007 crs.
Financial Performance (at standalone level)
|Debt to Equity||3.07||2.76||1.72|
*Debt equity = (Borrowings – Bank Overdraft – Unamortised expense) / Equity (including preference)
CRAR of NBFCs in the group
|Name of the NBFC||Minimum Regulatory CRAR||CRAR as of March 31, 2021||CRAR as of March 31, 2022||CRAR as of March 31, 2023|
|Vivriti Capital Limited||15%||40.31%||29.57%||25.74%|
Borrowings of the NBFC
Top 10 NCD holders as of June 2023:
|S.No||Name of holder||Category of holder||Face value of holding in INR Crores||Holding as % of total outstanding NCD of the Issuer|
|1.||Standard Chartered Bank||Bank-Foreign Commercial Bank||100.00||7.55%|
|2.||CredAvenue Securities Pvt Ltd||Corporate Body-Domestic||92.16||6.95%|
|3.||Nippon Mutual Fund||Mutual Funds – MF||58.50||4.41%|
|4.||Kotak Mutual Fund||Mutual Funds – MF||50.00||3.77%|
|5.||JM Financial Products Ltd||Corporate Body-Domestic||50.00||3.77%|
|6.||Sundaram Finance Ltd||Corporate Body-Domestic||50.00||3.77%|
|7.||Axis Mutual Fund||Mutual Funds – MF||49.00||3.70%|
|8.||MAS Financial Services Ltd||Corporate Body-Domestic||46.20||3.49%|
|9.||Karius Shavak Dadachanji||Resident- Ordinary||44.50||3.36%|
|10.||Shyam Metallics & Energy Ltd||Corporate Body-Domestic||40.00||3.02%|
Nature of Borrowings
|Nature of Borrowings||June 23||FY23||FY22|
Type of Borrowings
|Type of borrowing||June 23||FY23||FY22|
Peer Comparison* (March 2023)
|Particulars||Vivriti Capital||Northern Arc||MAS Financial|
|Revenue from operations||688||1,305||988|
*Consolidated **ROE & ROA have been calculated. ROE = PAT/ (Average of net worth for 2 years). ROA = PAT/ Total assets
|Rating Agency||Vivriti Capital||Northern Arc||MAS Financial|
|CRISIL||Not Rated||Not Rated||Not Rated|
|CARE||A/Stable||Not Rated||Not Rated|
|India Ratings||Not Rated||A+/Stable||Not Rated|
- Adequate capitalisation of Vivriti Capital Limited with regular capital infusion from private equity investors
- Improving scale of operation to an AUM of more than 5000+ crs and consistent improvement in profitability at NBFC level.
- Comfortable group leverage.
- Diversified resource profile (From Banks, NBFC, MF etc)
- Inconsistent profitability at the consolidated level.
- Limited track record as the operations have commenced in June 2017.
- Non granular portfolio as the company is into wholesale lending.