As per BSE announcement:

Repco Home Finance Limited has informed the Exchange that the Company has raised Rs.100 Crore by mode of private placement of 1000 Zero-Coupon Secured, Redeemable and Non-Convertible Debentures (SRNCD) of face value Rs. 10,00,000 each (at par) and maturing on September 06, 2018. (XIRR 9.21%).

This should further reduce the cost of funds as 9.21 is lesser than its current cost of funds which is about 50 basis points above 9.21, if I remember correctly. Though 100 crore is less compared to its current borrowings, the future seems pretty obvious that the cost of funds for Repco will come down BUT the benefits may not be passed to its non-salariedcustomers at the same rate which is more beneficial to Repco as it has higher proportion of non-salaried borrowers in its fold.

Add to this, any further reduction of interest rates by RBI (as and when) should aid its bottom line.

Disclosure: invested.

It’s very difficult to replicate what Gruh has done but Repco seems to be doing a good job compared to its other peers. Gruh will command premium over Repco in the foreseeable future is what I believe. Overall, in this sector whoever focuses on opportunity size with prudent risk management will grow a lot and also fall lesser in case of bubble bursts in future.

Disclosure: Invested in both companies discussed.

Hi @sajijohn ,

Warrants issued once in while is fine to raise capital.
But each year issuing warrants does seem concerning which Pankaj Seth is is being issued frequently. The promoters have been increasing their stake thru warrant and not buying from open market.
Exited due to same reason.

AR 2014-15 says “During the year 2014-15 the Company has converted 450000 Optionally Fully Convertible Warrants (OFCWs) into 450000 Equity shares of Rs.10/- each at an issue price of Rs.76.57/- per Share (including Premium @Rs.66.57/- per Share) in the Board Meeting held on 18th June, 2014 to Mr. Pankaj Seth (2,25,000 Equity Shares of Rs.10/- each) and Mrs. Anisha Seth (2,25,000 Equity Shares of Rs.10/- each) and the aggregate proceeds amounting to Rs.2,58,42,375/- in aggregate received balance 75% during the year through allotment and conversion of Warrants has been utilized for the object for which such issue was made” Is it normal practice to give warrants at such heavy discount? Are there any more warrants pending? At what point should we raise a red flag?