Non-Convertible Debentures Opened on Tuesday, February 15, 2022
Sixth Public Issue of NCDs by KLM Axiva Finvest Limited
100% security cover created for investors
Rapid expansion of branches
Mumbai, February, 2022: The public issue of secured, redeemable, non-convertible debentures of face value of ₹ 1,000 each (NCDs), at par, aggregating up to ₹ 10,000 lakhs with an option to retain over subscription up to ₹ 10,000 lakhs, aggregating up to ₹ 20,000 lakhs (the “Issue”) by KLM Axiva Finvest Limited (“Company”) has opened now. The Company is a non-deposit taking systemically important non-banking finance company (“NBFC”) primarily serving low and middle income individuals and businesses that have limited or no access to formal banking and finance channels. The Company offers variety of gold loan schemes to our customers to suit their individual needs. The schemes differ in relation to the amount advanced per gram of gold, tenure, interest rate chargeable and amount of loan.
The Issue has opened for subscription on Tuesday, February 15, 2022, and will close on Friday, March 11, 2022. Vivro Financial Services Private Limited is the lead manager to the Issue and Vistra ITCL (India) Limited is the debenture trustee to the Issue. Care Ratings Limited has given the ratings to the Issue as “CARE BB+; Positive (Double B Plus; Outlook: Positive)”. The annual interest rate set for the Issue is ranging from 9.75% to 11.25% and is available in monthly, annually and cumulative options for tenures 366 days, 400 days, 18 months, 2 years, 3 years, 5 years and 80 months, giving the effective yield of upto 11.57% for the longer duration. As on December 31, 2021, the Company operated through 342 branches across four states namely Kerala, Karnataka, Tamil Nadu and Telangana and corporate office at Kochi.
On the security to the Investor, the Company will create the security for the NCDs in favour of the debenture trustee to the Issue for the debenture holders holding the NCDs on the assets to ensure 100.00% security cover of the amount outstanding including interest in respect of the NCDs at any time
The Company intends to use the net proceeds of the Issue, after meeting the expenditures of and related to the Issue, for the purpose of onward lending, financing and repayment/ prepayment of principal and interest on existing borrowings and for general corporate purposes.
With deepening market penetration by Fintechs and NBFCs, the share of small ticket size loans is gradually increasing. NBFCs dominate the small ticket size loans segment, with a share of ~65%. The forces driving Gold Loan and other personal loans growth in India are India has lower household debt to gross domestic product (GDP) ratio as compared to other emerging economies. Lower turnaround time as most salaried individuals today are tech-savvy and prefer a digital interface which obviates paperwork. Customised and simplified products made possible through technological advancements increasingly cater to customer needs. There are other macro reasons like favourable demographics, economic stability for personal loans, there was fall in last fiscal on account of pandemic leading to consumers not willing to take up any additional debt. Though this mindset has seen a shift with markets opening up and economy catching up with normalcy. (Source: Industry report on gold loans, personal loans, MSME loans, and microfinance loans – February 2022 issued and prepared by CRISIL Limited)
