NBFCs to look for Retail money as Mutual Funds, banks to keep a tight rein on the funds
Four non-banking finance companies are queuing up to sell their retail bonds in the next two months, suggested that viability remains intact for para banks despite the crisis created by IL & FS. Shriram City Union, Aditya Birla Finance, L&T Finance, and Magma Fincorp aims to raise its funds to Rs 12,000 crore in total.
Aditya Birla Finance is considering to raise their funds to Rs 3,000-5,000 crore, L&T Finance to raise to Rs 2,500-5,000 crore, depending upon the market condition. Both the companies will raise their funds in one or two tranches. The Shriram City Union has raised funds to Rs 3,000 crore, while Magma Fincorp is likely to sell up to Rs 1,000 crore.
The L&T Finance and Aditya Birla Finance both are rated ‘AAA,’ the top grade, by rating firms while the other two are 1 or 2 notches lower. The retail subscriptions of these securities by these small investors are relatively better than these institutional or corporate investors.