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Shriram City Union Finance Plans To Raise Up To Rs 400 Crore Debt Capital

The bonds in the nature of principal protected market-linked non-convertible debentures will be of face value of Rs 10 lakh each.

<div class="paragraphs"><p>Indian rupee bank notes. (Photo: Usha Kunji/BQ Prime)</p></div>
Indian rupee bank notes. (Photo: Usha Kunji/BQ Prime)

Shriram City Union Finance looks to raise up to Rs 400 crore debt capital by issuing bonds on a private placement basis.

The Banking and Securities Management Committee of the company on Wednesday approved to issue secured and listed redeemable bonds at a base issue size of Rs 200 crore, with a green shoe option up to Rs 200 crore, aggregating to Rs 400 crore.

The bonds in the nature of principal protected market-linked non-convertible debentures will be of face value of Rs 10 lakh each, Shriram City Union Finance said in a regulatory filing.

The fundraise comes ahead of the company's merger with group company Shriram Transport Finance Company, which is expected to be completed by the October-December quarter.

The merged entity will be known as Shriram Finance Ltd. and it will become the largest retail non-banking finance company in the country.

The funds will be raised in one or more tranches on a private placement basis.

Market Linked Debentures offers are market-linked and the returns that are not fixed. The returns are dependent on an underlying index such as equity benchmark, government yield or gold index.

The principal protected MLDs guarantee that an investor will at least get back the principal amount upon maturity, typically of 13 to 60 months.