Hinduja Leyland Finance Ltd, the commercial vehicle (CV) financing arm of the Hinduja Group, has filed draft papers with capital markets regulator Securities and Exchange Board of India (SEBI) for its initial public offering.
The company plans to raise about Rs 500 crore (approximately $75 million) through a fresh issue of shares, besides an offer-for sale of up to 26,608,810 equity shares by the existing backer Everstone Capital.
Also, the company is considering a pre-offer placement of up to 26 million equity shares for an amount not exceeding Rs 200 crore (about $30 million).
With this, Hinduja Leyland Finance has become the seventh company to file papers with capital markets regulator this year for launching an IPO.
Prior to that, Seaways Shipping, CL Educate, HPL Electric & Power, Dilip Buildcon, Quess Corp and Advanced Enzyme Technologies have filed IPO papers with SEBI.
Here's a snapshot of the IPO:
* Fresh issue of shares to raise up to Rs 500 crore (about $75 million) and an offer for sale of up to 26 million equity shares.
* Bankers: Axis Capital, ICICI Securities, SBI Capital Markets and Yes Securities.
Objects of the issue
The non-banking finance company plans to use the proceeds to augment its capital base to meet its future capital requirements over the next two financial years (fiscal 2017 and 2018).
Hinduja Leyland Finance, which began operations in March 2010, is a part of the Hinduja group which is a diversified global business group with a track record of growing business in several industries. The company provides financing to a range of commercial and personal vehicles, which include medium and heavy, light and small commercial vehicles, cars, multi-utility vehicles,
three-wheelers and two-wheelers, as well as various kinds of used vehicles.
The Chennai-headquartered NBFC is jointly owned by Ashok Leyland and other entities of the Hinduja Group.
Its assets under management (AUM) grew at a CAGR of 54.37 per cent from Rs 1,177.85 crore as of March 31, 2011 to Rs 6,688 crore as of March 31, 2015.
Its capital adequacy ratio, or CAR, was 19.67 per cent as of March 31, 2015 and 17.05 per cent as of September 30, 2015, compared with the RBI stipulated minimum requirement of 15 per cent.
As of December 31, 2015, its operations included 317 branch offices and 1,550 business locations spread across 22 states and two union territories across India.
It has also entered into preferred financier arrangements with various motor vehicle OEMs to provide financing for their vehicles, and work closely with their respective dealer network to provide vehicle finance products to their customer base.
For financial year 2015, the firm registered a total income of Rs 821.7 crore compared with Rs 641 crore in the previous financial year. Its net profit for the fiscal stood at Rs 110 crore compared with Rs 78 crore in the year-ago period.
In the six months ended September 30, 2015, revenues stood at Rs 521 crore and net profit was Rs 63 crore.
Everstone had invested around Rs 200 crore for an undisclosed stake in the company in 2013. It currently holds about 14 per cent stake and will be part exiting by selling nearly half of it.