The company will raise up to Rupee75 crore through the sale of non-convertible debentures to institutional investors as early as next month, CEO Ravindra Rao said.
“This will be our first-ever debenture issuance and will make us a deemed listed company and give us some fresh funds to buy more bad assets. We continue to enjoy credit lines from a few state-run banks,” said Rao, who took over as CEO of Reliance ARC in March.
A part of Reliance Capital, Reliance ARC received the RBI licence in February 2008. However, it has consciously stuck to buying small loans owed to banks by small enterprises and individuals. Hence, its assets under management (AUM) of Rupee2,000 crore are less than those of larger peers such as Edelweiss ARC, which has about Rupee45,000 crore in AUM.
The companys total equity base is Rupee160 crore and total debt Rupee135 crore, giving it a debt to equity ratio of 0.8 times.