Dhani Loans and Services Limited was incorporated in 1995. Dhani Loans and Services Limited is a non-deposit taking systemically an important NBFC of the country registered with the RBI. The Company is engaged in the business activity of providing digital healthcare and finance products. It accounts for delivering its services through its application platform known as Dhani App. In this article, we take a closer look at the Dhani Loans and Services NCD Details and its possible future prospects.
Dhani Loans and Services Limited also offers personal loans and secured and unsecured business loans to majorly individuals to establish a small-scale business of their own. It provides the same facility to the corporates also. Dhani Loans and Services Limited is a full 100% subsidiary company of Dhani Services Limited. Earlier, the Company was known as the Indiabulls Consumer Finance Limited. As per the latest reports, the Company holds 2.42 million subscribers to their unique solution of providing financial assistance via Dhani OneFreedom Card. The Company has a strong and growing presence in over 700 cities and towns.
The Company has provided the services are as follows:
- Secured MSME loans
- Unsecured MSME loans
Dhani Loans and Services Limited is also associated with the Indiabulls Investment Advisors Limited to market non-discretionary wealth management. The Company also holds an association with the Indiabulls Alternate Investments Limited for:
- Residential mortgages
- SME financing
- Loans against property
- Asset management
- Asset reconstruction
- Life insurance
- General insurance
OBJECTS OF THE ISSUE:
The Company stated that the funds been raised from the proceeds of the NCD would be utilized to:
- For onward lending.
- Financing along with the repayment and the prepayment of the interest and the principal of the outstanding dues of the Company.
- General Corporate Purposes.
DHANI LOANS AND SERVICES NCD DETAIL:
After approving the NCD offer, the Company’s board has been coming up with their fifth debt-based NCD offer since February 2019. The Company’s first three debt offers were Indiabulls Consumer Finance Limited, while the last two were Dhani Loans and Services limited. The Company also stated that the funds raised via the NCD offer would be to part financing the needs for carrying out the onward lending and the financing of its business. The Company stated that it would grant around 75% of the net issue collections from the NCD offer. The Company will also use the rest 25% for general corporate purposes.
The NCD offer of the Company is a Rated, Secured, Transferable and Redeemable Non-Convertible Debentures (NCDs) of price been fixed at Rs. 1000 each. The Company aims to raise around Rs. 100 crores via this NCD offer. The NCD offer of the Company also holds a greenshoe option to retain oversubscription to the tune of Rs. 100 crores raised within the offer. As a result, the overall size of this NCD issue will be Rs. 200 crores. The minimum application made within this NCD offer is for 10 NCDs and in multiples of 1 NCD. Post allotment of the NCD, the shares will be listed on BSE and NSE.
This debt offering consists of 370 days, 24 and 36 months with offered coupon rates that range from 10.00% to 11.00% within the Monthly, Annually and Cumulatively payment of the interests. The Company also stated that there is no option of Put and Call buying and writing for this debt-based NCD issue. Also, the Company stated that no portion of the NCD offer has any reservation.
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| Issue Open | April 19, 2022 to May 10, 2022 |
| Security Name | Dhani Loans and Services Limited |
| Security Type | Secured, Redeemable Non-Convertible Debentures |
| Base Issue Size | Rs. 100.00 Crores |
| Shelf Issue Size | Rs. 100.00 Crores |
| Issue Price | Rs. 1000 per Non-Convertible Debentures |
| Face Value | Rs. 1000 each Non-Convertible Debentures |
| Minimum Lot size of NCD | 10 NCD that corresponds to Rs.10,000 |
| Market Lot of the NCD | 1 NCD |
| Listing At | BSE, NSE |
| Credit Rating | IVR AA/ Stable Outlook |
| Tenor of the NCD | 370 days, 24 months and 36 months |
| Series | Series I to VII |
| Payment Frequency of the NCD | Monthly, Annual and Cumulative |
| Basis of Allotment of the NCD | First Come, First Serve Basis |
| Options | Tenure | Frequency of Interest Payment | Coupon (% per annum) for NCD Holders in Category I, II, III & Iv | Redemption Amount (₹ /NCD) on Maturity for NCD Holders in Category I, II, III & IV (%) | Effective Yield for NCD Holders in Category I, II, III & IV (%) | Put and Call Option |
| I | 370 days | Cumulative | NA | Rs. 1,101. 44 | 10.00% | NA |
| II | 24 months | Annual | 10.50% | Rs. 1,000 | 10.49% | NA |
| III | 24 months | Cumulative | NA | Rs. 1,221.36 | 10.50% | NA |
| IV | 24 months | Monthly | 10.03% | Rs. 1,000 | 10.50% | NA |
| V | 36 months | Annual | 11.0% | Rs. 1,000 | 10.99% | NA |
| VI | 36 months | Cumulative | NA | Rs. 1368.05 | 11.00% | NA |
| VII | 36 months | Monthly | 10.49% | Rs. 1,000 | 11.00% | NA |
DHANI LOANS AND SERVICES NCD ALLOCATION RATIO:
| Category of the Allocation | NCD Allocation | NCD’s Reserved |
| Institutional Investors | 30% | 300,000 |
| Non-Institutional Investors | 10% | 100,000 |
| High Net worth Investors | 30% | 300,000 |
| Retail Investors | 30% | 300,000 |
| Total NCD’s | 100 % | 1,000,000 |
PROMOTERS OF DHANI LOANS AND SERVICES LIMITED:
The promoters of the Company are as follows:
- Dhani Services Limited
STRENGTHS OF THE COMPANY:
- The Company has the backing of an Experienced promoter’s base that has been helped and managed by reputed board members. The Company benefits a lot from the strong experience that has helped it scale up its operations and form a proper channel for risk management in the business.
- Dhani Loans and Service s Limited has a comfortable capitalization and a strong resource-raising ability. The Company has managed to scale up their tangible Net Worth to Rs. 4263.37 Crores in March 2020. The Company has recorded a great success as far as the capital infusion is considered via raising funds from promoters and the Company’s investors.
- The Company also holds an adequately matched asset-liability profile with a strong linkage between its investors and PE firms.
- The Company’s Global Depository Receipts have been listed on the Luxembourg Stock Exchange, which provides a significant risk cushion for their business operation in India. The Company also registered an improvement in their Gearing Ratio Matrix by reducing the borrowings.
- Dhani Loans and Services Limited also has better income and financial parameters due to the improvement in their Net Interest Margins and growth in their Loan Book.
WEAKNESS OF THE COMPANY:
- In the last few quarters, the Company registered aReduction in their loan portfolio. This decline is due to the sale of loan assets and the derecognition of such assets from their loan books. The Company also estimated that it would have gained on the sale of its loan portfolio, which summed to Rs. 616.69 Crores.
- Dhani Loans and Services has also securitized its loan assets in unrelated entities.
- The major weakness of the Company is their Moderate Asset Quality. The Gross Non-Performing Assets of the Company were increased to 1.93% compared to 0.80%. Similarly, the while the Net Non-Performing Assets of the Company are currently at 0.74%. The increase in the NNPA and GNPA of the Company is due to the reduction in the portfolio size of the Company.
- The COVID-19 global pandemic has severely impacted Dhani Loans and Service, like other NBFCs. The pandemic brought in a decline along with the volatility in global and on account of staggering economic activity. The lower lending opportunity impacted the business operation on financial and operational terms with the decline in collection efficiency.
DHANI LOANS AND SERVICES NCD RATING:
The NCD offers brought by the Company have been rated as IVR AA/ with a Stable Outlook. Infomerics Valuation and Rating Private Limited have done the rating of the NCD offer. The rating agency has assigned a stable outlook with no such impressive commentary from their side. Rather the rating agency also accounted that the Company holds a degree of safety in terms of the timely servicing of its financial obligations and the carry-over of low credit risk.
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COMPANY FINANCIALS:
| Particulars | For the year ending with the amount as in Rs in Millions | ||||
| 31 March 21 | 31 March 20 | 31 March 19 | |||
| Total Assets | 83,107.57 | 97,281.77 | 138,007.40 | ||
| Total Revenue | 11,766.94 | 26,836.81 | 17,752.29 | ||
| Profit After Tax | -1,158.26 | -374.27 | 3,845.16 |
DHANI LOANS CONTACT DETAILS:
Dhani Loans and Services Limited
Indiabulls House, One International Centre,
Senapati Bapat Marg,
Elphinstone Road, Mumbai – 400 013
Phone: 91 22 6189 1000, + 91 22 6144 6344,
Email: ncdsupport@dhani.com
Website: www.dhaniloansandservices.com
DHANI LOANS NON-CONVERTIBLE DEBENTURES REGISTRAR:
KFin Technologies Private Limited
Selenium Tower B, Plot 31-32, Gachibowli, Nanakramguda,
Hyderabad – 500 032, Telangana
Phone: +91 40 6716 2222
Fax: +91 40 2343 1551
Email: dhaniloans.ncdipo@kfintech.com
Website: www.kfintech.com
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