Indostar Capital Finance Limited is a leading non-banking finance company (“NBFC”) registered with the Reserve Bank of India as a systemically important non-deposit taking company. Indostar primarily offers customised, structured rupee term loans to corporates and also loans to small and medium enterprise (“SME”) borrowers in India.
Indostar has four principal businesses -
- Corporate lending: This business caters to the funding needs of mid-to-large sized companies in the manufacturing, services and infrastructure industries. Indostar offers senior secured debt, structured financing, promoter finance and special situation funding. It also lends to real estate developers to finance construction of residential and commercial buildings and take-out of early-stage equity investors. As on December 31, 2017, it had a corporate lending credit exposure of Rs.3,969.3 crore.
- SME lending: The SME lending business, which commenced in 2015, extends secured business loans to small and medium size enterprises, including businessmen, traders, manufacturers and self-employed professionals. The properties that are offered as security for these loans are typically completed and largely self-occupied residential and commercial buildings. The company offers SME loans at Mumbai, Delhi, Chennai, Bengaluru, Hyderabad, Jaipur, Surat, Ahmedabad, Pune and Indore. As of December 31, 2017, with its total exposure in this space amounting to Rs. 1,173.3 crore.
- Vehicle finance: This segment finances the purchase of used/new commercial vehicles, passenger vehicles and two-wheelers. Indostar began the vehicle finance business in November 2017 and has an exposure of Rs. 14.3 crore as on December 31, 2017.
- Housing finance: The housing finance business is operated through a subsidiary - IndoStar Home Finance Private Limited. The business comprises has two divisions - affordable housing finance, which began operations in September 2017, and retail housing finance, which commenced operations in March 2018. Affordable housing loans of up to Rs. 30 lakh mainly cater to salaried and self-employed customers, where the property’s carpet area is not over 60 square meters and the property cost is up to Rs. 50 lakh. Retail home loans also serve the same target customers. The company had an exposure of Rs.14.5 crore in the home loan space as of December 31, 2017.
- Rs. 1840-1844 crore Fresh Issue - Rs. 700 crore,
offer for sale - 2,00,00,000 equity shares - 26 equity shares and in multiples thereafter
- QIBs - 50% NIBs - 15% Retail investors – 35%
- Rs. 10
- ASBA mandatory (No cheques will be accepted)
- Proposed to be listed on BSE and NSE
- JM Financial Ltd, Kotak Mahindra Capital Company Ltd, Morgan Stanley India Company Private Ltd, Motilal Oswal Investment Advisors Ltd, Nomura Financial Advisory and Securities (India) Private Ltd.
- Link Intime India Private Limited
- Professional and experienced management team
- Well-established corporate and strong SME lending businesses
- High asset quality achieved through robust credit assessment and
risk management framework - Proven track record of delivering results and a well-diversified funding profile
- Ownership by institutional investors ensuring international corporate governance standards
The offer comprises a fresh issue of Rs. 700 crore and an offer for sale of 2 lakh equity shares. Selling shareholders will be entitled to the proceeds of the offer for sale of their respective portions of the offered shares, respectively, after the offer-related expenses are deducted. Indostar Capital Finance will not receive any proceeds from the offer for sale.
An initial public offering (IPO)/public issue is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves the way for listing and trading of the issuer’s securities.
The shares are initially issued in the primary market at an offering price determined by the lead manager(s)/the merchant banker(s) to the IPO.
The primary market consists of a syndicate of investment banks and broker dealers that the lead managers assemble and that allocate shares to institutional, high net worth individuals (HNI) and individual/retail investors.
As far as IPOs are concerned, a price band is a value-setting method whereby a seller indicates an upper and lower cost range, between which the buyers/investors are able to place their bids. The price band's floor and cap provide guidance to the buyers.
It is up to the company to decide on the IPO price or the price band, in consultation with the lead managers.
The basis of IPO price is disclosed in the offer document. The issuer is required to disclose in detail about the qualitative and quantitative factors justifying the IPO price.
The IPO price is normally based on such factors as the company’s financials, products and services, income stream as well as the demand for the shares and current market conditions.
The lead managers must determine a fair offering price, which takes into consideration the need for the company to raise capital while offering the new issue at a price which represents a fair value of the shares.
A Red Herring Prospectus (RHP) is a document submitted by a company (issuer) as part of a public offering or an IPO of securities (either stocks or bonds).
A retail individual investor means an investor who applies or bids for securities of or for a value of not more than Rs 2,00,000.
Yes. He can bid in a book-built IPO for a value not more than Rs 2,00,000. Any bid made in excess of this will be considered in the HNI category.
Yes. Investors can change or revise the quantity or price in the bid using the form for changing/revising the bid that is available along with the application form. However, the entire process of changing or revising the bids shall be completed before the IPO closes.
In case of fixed price issues, investors are intimated about the CAN/Refund order within 10 days of the closure of the IPO.
In case of book built IPOs, the basis of allotment is finalised by the book-running lead managers within two weeks from the closure of the issue. The registrar then ensures that the demat credit or refund as applicable is completed within 6 working days of the closure of the issue.
In the case of book-built issues, the exchanges (Bombay Stock Exchange/National Stock Exchange) display the data regarding the bids obtained (on a consolidated basis between both these exchanges).
The data regarding the bids is also available category-wise.
Investors are entitled to receive a Confirmatory Allotment Note (CAN) in case they have been allotted shares within 6 working days from the closure of a book Built issue. The registrar has to ensure that the demat credit or refund as applicable is completed within 6 working days of the closure of the book-built issue.
The lead managers also publish an advertisement at least in an English national daily with wide circulation, one Hindi national paper and a regional language daily circulated at the place where registered office of the issuer company is situated.
The listing on the stock exchanges is done within seven days from the finalisation of the issue.
Ideally, it would be around three weeks after the closure of the book-built issue.
In case of fixed price issue, it would be around 10 days after closure of the issue.