Thepublic issue of secured, redeemable, non-convertible debentures of face value of ₹ 1,000 each (NCDs), at par, aggregating up to 10,000 lakhswith an option to retain over subscription up to ₹ 10,000 lakhs, aggregating up to ₹ 20,000 lakhs by KLM Axiva Finvest Limited currently open for subscription,has been oversubscribed. As on March 4, 2022the Issue has received asubscription of 158.04%The Company is a non-deposit taking systemically important non-banking finance company(NBFC)primarily serving low and middle-income individuals and businesses with limited or no access to formal banking and finance channels.The Company offers variety of gold loan schemes to its customers. The schemes differ in relation to the amount advanced per gram of gold, tenure, interest rate chargeable and amount of loan.
The Issue will close on Friday, March 11, 2022. Vivro Financial Services Private Limitedis the lead manager to the Issueand Vistra ITCL (India) Limitedis the debenture trustee to the Issue. Care Ratings Limited, the credit rating agencyhas given the ratings to the Issue as“CARE BB+; Positive (Double B Plus; Outlook: Positive)”.
The annual interest rate set for theIssue is ranging from 9.75%to 11.25% and is available in monthly, annually and cumulative options for tenures 366 days, 400 days, 18 months, 2 years, 3 years, 5 years and 80 months, giving the effective yield of upto 11.57% for the longer duration. The Company does most of its business through its branches and as on December 31, 2021, operated through342branches across four states namely Kerala, Karnataka, Tamil Nadu and Telangana and corporate officeat Kochi.
On the security to the Investor, the Company will create the security for the NCDs in favour of the debenture trustee to the Issue for the debenture holders holding the NCDs on the assets to ensure 100.00% security cover of the amount outstanding including interest in respect of the NCDs at any time
The Company intends to use the net proceeds of the Issue, after meeting the expenditures of and related to the Issue, for the purpose of onward lending, financing and repayment/prepayment of principal and interest on existing borrowings and for general corporate purposes.
With deepening market penetration by fintechs and NBFCs, the share of small ticket size loans is gradually increasing. NBFCs dominate the small ticket size loans segment, with a share of ~65%. The forces driving Gold Loan and other personal loans growth in India are India has lower household debt to gross domestic product (GDP) ratio as compared to other emerging economies. Lower turnaround time as most salaried individuals today are tech-savvy and prefer a digital interface which obviates paperwork. Customised and simplified products made possible through technological advancements increasingly cater to customer needs. There are other macro reasons like favourable demographics, economic stability for personal loans, there was fall in last fiscal on account of pandemic leading to consumers not willing to take up any additional debt. Though this mindset has seen a shift with markets opening up and economy catching up with normalcy.(Source: Industry report on gold loans, ploans, MSME loans, and microfinance 
loans – February 2022 issued and prepared by CRISIL Limited)
