Bengaluru-based CreditAccess Grameen is planning to increase dependence on non-bank funding such as external commercial borrowing (ECB) and non-convertible debentures (NCDs) within its overall funding mix from 30 per cent to 40 per cent in the next three years.
Correspondingly, bank funding within the company’s overall funding mix will come down from 70 per cent to 60 per cent.
To raise ₹500 cr
As part of this plan, the non-banking finance company-microfinance institution (NBFC-MFI) is planning to raise up to ₹500 crore via maiden public issue of secured, redeemable NCDs, according to Udaya Kumar Hebbar, MD and CEO.
Also in the works is a $150 million ECB issue in the next six months. This ECB is over and above the $200 million that has already been tied-up, he added.
To build secured loan portfolio
As part of its loan portfolio diversification strategy, CA Grameen has started a pilot for secured loans such as loans against jewellry, two-wheeler loans and loan against property for SMEs, Hebbar said. The company will build a secured loan portfolio of about ₹6,000 crore in the next five years, he added.
Meanwhile, CA Grameen’s NCD issue, which opens on November 14 and closes on December 2 (with an option of early closure), has three tenure options – 24 months (coupon: 9.45 per cent), 36 months (9.60 per cent) and 60 months (10 per cent).
Hebbar observed that NCDs offer one more avenue for mobilising long-term resources even as the company has comfortable liquidity and positive asset-liability profile.