Mumbai-based InCred Financial Services Ltd said it has closed its second issue of covered bond for Rs 75 crore ($10 million) as part of its strategy to diversify liabilities.
The deal saw investors across the spectrum including family offices, ultra HNIs, corporate treasuries and NBFCs, the firm said.
The covered bond’s underlying loans were selected from InCred’s personal loans portfolio, it added.
The transaction structuring was done entirely in-house.
The issuance has a call option at the end of 21 months and the pricing offered to investors is 9.15% on an XIRR basis.
“This positions InCred well as we continue our focus on funding diversification and innovation to support our asset growth trajectory,” Vivek Bansal, finance chief, InCred, said.
Covered bonds had a market size of Rs 2,200 crore in FY21, the company said.
NBFCs have been seeking ways to diversify their liabilities after banks and mutual funds reduced their exposure to this segment after the IL&FS debacle in 2018.
Founded in 2016 by Bhupinder Singh, former head of investment banking at Deutsche Bank Asia-Pacific, the company launched market operations in January 2017.
InCred Financial Services offers personal loans, SME loans and education loans.
KKR India Financial Services proposed a merger with InCred Financial Services last year after many of the PE giant’s loans went bad.
InCred Financial Services is backed by Investcorp, FMO and Investcorp.
The group’s asset management arm entered the equities institutional business with the acquisition of Earnest Innovation Partners Pvt Ltd.
The group also has InCred Capital which is focused on wealth and asset management, structured finance, debt and equity capital markets and investment banking. InCred Capital has four fee-based businesses—wealth management, asset management, capital markets and advisory.