Debentures with Intentions—Satin Creditcare Sets Sights on ₹50K Cr Lending Boost

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Satin Creditcare Network Ltd (NSE: SATR.NS) has announced a major fundraising scheme, raising up to ₹50 billion (₹5,000 crore) through the issuance of non-convertible debentures (NCDs) on a private placement basis. The move is aimed at strengthening the company's ability to lend and increase its growth in India's microfinance industry.

1. Fundraising Model

The NCDs will be issued in one or more tranches within a span of one year, upon shareholders' approval at the upcoming AGM.
Each tranche's interest rate, maturity date, and tenure will be decided by the company's committee at issue time.
The NCDs will be offered to eligible non-institutional and institutional investors, according to SEBI guidelines.

2. Strategic Rationale

Satin Creditcare intends to diversify the sources of funding and reduce the cost of borrowing by using debt instruments with a structured format.
The funds will be used to grow its micro-lending book, liquidity, and fund financial inclusion activities in under-penetrated regions.
The company has a strong track record and has already tapped ₹6,846 crore in FY23 from various lenders.

3. Financial Snapshot

Satin Creditcare recorded a net profit of ₹264 crore in FY23, which was six times of the previous year.
Its net interest income (NII) rose to ₹1,186 crore, while gross NPAs reduced to 3.28% from 8.01% the previous year.
The bank operates in 24 states and union territories and serves over 95,000 villages.

Sources: Moneycontrol, CNBC TV18, NDTV Profit