Gold loan financier Manappuram targets to raise $250m via bonds

Photo: Reuters

Gold loan financier Manappuram Finance Ltd plans to raise up to $250 million through offshore bonds as it joins other non-banking financial companies (NBFCs) in tapping overseas markets to raise debt at a time when domestic liquidity for the sector is constrained.

Manappuram mainly provides loans against gold jewellery, along with short-term personal and business gold loans to retail customers. Its other lines of business include vehicle and equipment finance, loans to small and medium businesses and fee-based services such as forex and money transfer.

The lender has already concluded investor roadshows and the bond issue could be launched within a week, according to two people aware of the company’s plans.

“The first tranche of the planned US-dollar bond issuance is expected to close within a week. Manappuram aims to raise $200-250 million. UBS India is advising the gold loan financier on the capital raise,” said one of the two persons mentioned above, requesting anonymity.

“Like several other NBFCs this year, Manappuram also aims to diversify its sources of capital and is thus tapping overseas debt markets,” according to the second person mentioned above, who also requested anonymity.

On 27 November, Thrissur-based Manappuram informed exchanges that its board has approved a plan to undertake the issue of foreign currency-denominated bonds under a Euro medium-term note programme through which the NBFC would raise up to $750 million in one or more tranches.

Emails sent to Manappuram Finance did not elicit a response, while UBS chose not to comment.

Several domestic NBFCs have opted to explore the feasibility of raising debt overseas after defaults at Infrastructure Leasing and Financial Services Ltd in September 2018 caused a severe liquidity crunch in the non-bank lending sector.

Earlier in February, commercial vehicle financier Shriram Transport Finance Co. Ltd raised $400 million through its maiden offshore bond issuance.

In the quarter ended 30 September, Manappuram reported an 82% jump in its consolidated profit to 402.28 crore, compared to the corresponding period a year ago. Its total assets under management (AUM) grew by 31.91% to 22,676.93 crore during the period, while its gold loan AUM rose 20.45% to 15,168.34 crore, from the same quarter last year.

This article was first published in livemint.com

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.