Finance

Runway Growth Finance Corp. Prices Offering of 8.00% Notes due 2027

Published

2 years ago

November 30, 2022

Runway Growth Finance Corp. Prices Offering of 8.00% Notes due 2027

WOODSIDE, Calif., Nov. 30, 2022 (GLOBE NEWSWIRE) — Runway Development Finance Corp. (the “Firm”) (Nasdaq: RWAY), an externally managed enterprise improvement firm, in the present day introduced that it has priced an underwritten public providing of $45.00 million combination principal quantity of notes due 2027 (the “Notes”), which can end in internet proceeds to the Firm of roughly $43.65 million after cost of underwriting reductions and commissions however earlier than deducting bills payable by the Firm associated to this providing. The Notes will mature on December 31, 2027 and could also be redeemed in complete or partially at any time or once in a while on the Firm’s choice on or after December 31, 2024. The Notes can be issued in denominations of $25 and integral multiples of $25 in extra thereof and can bear curiosity at a price of 8.00% per yr, payable quarterly, with the primary curiosity cost occurring on March 1, 2023. As well as, the Firm has granted the underwriters a 30-day choice to buy as much as a further $6.75 million combination principal quantity of Notes to cowl overallotments, if any.

The providing is predicted to shut on December 7, 2022, topic to customary closing circumstances. The Firm intends to record the Notes on the Nasdaq International Choose Market beneath the image “RWAYZ.”

The Firm intends to make use of the web proceeds from this providing to repay excellent indebtedness beneath its Credit score Settlement with KeyBank Nationwide Affiliation (the “Credit score Facility”). Nevertheless, via re-borrowing of the preliminary repayments beneath the Credit score Facility, the Firm intends to make use of the web proceeds from this providing to make investments in accordance with its funding goal and methods described within the prospectus complement and the accompanying prospectus, to pay working bills and different money obligations, and for normal company functions. As of November 28, 2022, the Firm had $365.0 million of indebtedness excellent beneath the Credit score Facility, which bore curiosity at a price of 6.659% as of such date. The Credit score Facility matures on April 20, 2026.

Oppenheimer & Co. Inc., UBS Securities LLC, B. Riley Securities, Inc. and Ladenburg Thalmann & Co. Inc. are appearing as joint book-running managers of this providing. Compass Level Analysis & Buying and selling, LLC, Janney Montgomery Scott LLC and Hovde Group, LLC are appearing as co-managers of this providing.

Buyers are suggested to fastidiously contemplate the funding goal, dangers, costs and bills of the Firm earlier than investing. The preliminary prospectus complement dated November 30, 2022 and the accompanying base prospectus dated April 22, 2022, which have been filed with the Securities and Alternate Fee (“SEC”), comprise this and different details about the Firm and needs to be learn fastidiously earlier than investing. The knowledge within the preliminary prospectus complement, the accompanying prospectus and this press launch just isn’t full and could also be modified.

A shelf registration assertion relating to those securities is on file with and has been declared efficient by the SEC. The providing could also be made solely by the use of a preliminary prospectus complement and an accompanying prospectus, copies of which can be obtained from Oppenheimer & Co. Inc., 85 Broad Road, 23^rd Ground, New York, NY 10004 or by calling (800) 966 1559; copies may be obtained by visiting EDGAR on the SEC’s web site at http://www.sec.gov.

This press launch doesn’t represent a suggestion to promote or the solicitation of a suggestion to purchase the securities on this providing or every other securities nor will there be any sale of those securities or every other securities referred to on this press launch in any state or jurisdiction wherein such provide, solicitation or sale could be illegal previous to the registration or qualification beneath the securities legal guidelines of such state or jurisdiction.

About Runway Development Finance Corp.

Runway Development is a rising specialty finance firm centered on offering versatile capital options to late- and growth-stage corporations searching for a substitute for elevating fairness. Runway Development is a closed-end funding fund that has elected to be regulated as a enterprise improvement firm beneath the Funding Firm Act of 1940. Runway Development is externally managed by Runway Development Capital LLC, a longtime registered funding advisor that was shaped in 2015 and led by business veteran David Spreng. For extra info, please go to www.runwaygrowth.com.

Ahead-Trying Statements

Statements apart from statements of historic info included on this press launch could represent forward-looking statements, together with statements relating to our intentions associated to the providing mentioned on this press launch and the usage of proceeds from the providing, and usually are not ensures of future efficiency, situation or outcomes and contain quite a few dangers and uncertainties. Precise outcomes could differ materially from these within the forward-looking statements because of quite a few elements, together with these described once in a while in Runway Development’s filings with the SEC. Runway Development undertakes no responsibility to replace any forward-looking assertion made herein. All forward-looking statements communicate solely as of the date of this press launch.

IR Contacts:

Stefan Norbom, Prosek Companions, snorbom@prosek.com

Thomas B. Raterman, Chief Monetary Officer and Chief Working Officer, tr@runwaygrowth.com

Related Topics:Nasdaq:RWAY Runway Growth Finance Corp.

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Finance

Bajaj Finance loan loss provisions jump, NBFC to focus on collection efficiency | Mint

Published

4 hours ago

July 24, 2024

Press Room

Mumbai: Bajaj Finance’s loan loss provisions surged in the first quarter (April-June) of this financial year, driven largely by muted collections and higher provisioning requirements for ageing delinquencies.

This, the Pune-based non-bank lender said, has prompted it to now focus on improving its collection efficiency, which indicates the proportion of a loan’s repayment amount that is collected.

Gross loan losses and provisions for the quarter were ₹1,790 crore. During the quarter, the non-banking financial company (NBFC) utilized a management overlay of ₹105 crore towards loan losses and provisions, as a result of which net loan losses and provisions were at ₹1,685 crore.

Management overlay is a kind of management-level provision buffer made by companies for use during emergencies or crises. In this case, Bajaj Finance built this overlay largely during the pandemic.

Also read | Bajaj Finance Q1 results: Net profit up 13.8% YoY to ₹3,912 crore, revenue at ₹14,04 crore

In an analyst call late on Tuesday, the management said that while portfolio quality was steady and bounce rates were lower compared with the March quarter, significant movement of delinquent loans from stage 1 to stage 2 owing to muted collections led to the rise in loan losses in the June quarter.

Stage 2 assets, which warrant higher provisioning as against stage 1 assets, increased by ₹865 crore sequentially.

“The company is augmenting its debt management infrastructure as a mitigation measure,” it said in the investor presentation, with the management adding that they remain watchful of portfolio stress across business verticals and are “proactively pruning” exposure to certain customer segments.

“BAF (Bajaj Finance) reported higher than expected credit cost at 1.97%, an increase of 33 basis points sequentially. The surge in credit cost was on account of collection efficiency being impacted due to the elections,” Emkay Global Financial said in a note, adding that credit cost is expected to normalize over the next two quarters and be around 1.75-1.85% for FY25.

A basis point is one-hundredth of a percentage point.

Also read | HUL Q1 Results: Net profit rises 2.7% to ₹2,538 crore, revenue up 1.3% YoY

The company had also seen a rise in loan losses during the previous election cycle in 2019 and is seeing similar trends this time, the management said, adding that when loan losses surge either due to higher bounce rates or muted collections, it takes one to three quarters for levels to stabilize. As a result, loan losses are expected to remain at current levels in the ongoing quarter and should start to normalize by the third quarter (October-December) onwards, they said.

The company will have a clearer view on whether the muted collection trend is transient or not by the October quarter, they added.

Bajaj Finance’s gross non-performing asset (NPA) ratio improved marginally to 0.86% in the June quarter, from 0.87% a year ago. However, the net NPA ratio worsened to 0.38% from 0.31% a year ago, owing to the higher provisions. In the previous quarter, the gross NPA ratio was 0.85% and net NPA ratio at 0.37%.

So far, the stress is largely being seen in two- and three-wheeler finance, rural business-to-consumer, or B2C, (retail lending) and SME (small and medium enterprise) loan portfolios, even as growth in the rural business-to-business segment remains robust. Asset quality for the urban B2C segment is also steady, but the management is watchful for any signs of stress.

The management highlighted that the rural B2C portfolio has been seeing sluggish growth of 5-6% for the past year, including the 5% growth seen in Q1FY25. However, it expects some pickup going forward, pegging credit growth for FY25 at 10-11%. The company has been fine-tuning the borrower profile for the past year and is looking to broad-base the customer profile as was the case pre-Covid, it said.

Rural B2C loans for Bajaj Finance largely comprise cross-selling of personal loans, which have taken a hit following the increase in risk weights for the segment by the Reserve Bank of India (RBI). This led to stagnation in disbursements from November 2023 to June 2024 and is expected to temper growth in unsecured loans for the industry going forward.

Bajaj Finance’s share of unique customers, with no existing credit exposure, fell to 58% in June 2024 from 63% in March 2020. This means that of the current customers, 42% already have a relationship with the market in terms of unsecured or personal loans, an increase of 3% on year.

However, the company said that the overall borrower profile remains healthy, with the share of customers with outstanding personal loans having fallen from FY23 to FY24 in percentage terms.

The RBI, on 2 May, lifted the restrictions on sanction and disbursal of loans under ‘eCOM’ and ‘Insta EMI Card’ verticals, following which the NBFC restarted the EMI card business from May 10 and eCOM business from the first week of June, leading to a drag on disbursements during Q1. Both of these should pick up over the next three quarters, the company said, pegging overall loan growth for FY25 at 26-28%.

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Finance

How Budget 2024 Reforms Shape Your Personal Finance – Forbes India Blogs

Published

11 hours ago

July 24, 2024

Press Room

How Budget 2024 Reforms Shape Your Personal Finance – Forbes India Blogs

Budget Day is always a momentous occasion, sparking keen interest as we dissect its implications on our finances. While the certainty of taxes is something we all face, our primary concern is often how these changes impact our take-home pay, particularly for salaried individuals. Let’s break down this year’s Budget and see what it means for you.

As we adapt to these updates, keep your focus on what you can control: your personal growth and income. Investing in yourself and working to enhance your earnings can make a significant difference. Although taxes are a constant, steering your financial future lies in your hands.

Changes in your tax slab:

The Budget has revised the tax slabs in the new tax regime to enhance its appeal to taxpayers. Under this regime, the standard deduction is proposed to increase from ₹50,000 to ₹75,000.

Pay No Tax on an Income of up to ₹7.75 Lakh

The recent changes in tax slabs will result in significant savings for lower and middle-income groups, while those in higher-income brackets will see minimal impact. These adjustments allow salaried employees in the new tax regime to save up to ₹17,500 in income tax.

The higher standard deduction of ₹75,000 means that anyone with an annual income of ₹7.75 lakh will not have to pay any tax. Additionally, under the new regime, taxpayers with an annual income of up to ₹7 lakh are eligible for a full tax rebate under Section 87A.

This is the second change in the new tax regime’s slab structure in as many years. Last year’s Budget reduced the number of slabs from seven to six and extended the standard deduction to the new regime. Let me explain:

Improved Financial Stability for Pensioners

The Budget 2024 proposes increasing the family pension deduction from ₹15,000 to ₹25,000, providing greater financial stability for pensioners. Meanwhile, taxpayers who prefer the old tax regime will see no changes in their tax liabilities, as no updates were announced for that system.

Simplification of capital gains on real estate transactions:

The Budget 2024 has removed the indexation benefit for property sales, changing how capital gains are calculated. Previously, sellers could adjust their purchase price for inflation, reducing their taxable gains, and were taxed at 20 Percent on long-term capital gains (LTCG). Now, the LTCG tax rate is reduced to 12.5 percent, but without the inflation adjustment.

Here is an example to illustrate this change:

Mr. A bought a property for ₹50 lakh in FY 2004-2005. He sells the property in FY 2023-2024 for ₹1.5 crore. Under the previous rules, the purchase price of ₹50 lakh would be adjusted for inflation using the Cost Inflation Index (CII) numbers provided by the Income Tax Department. However, under the new rules, there will be no adjustment for inflation. The capital gains will be calculated by directly subtracting the purchase price from the sale price. Although the good news is that the LTCG tax rate has been reduced from 20 percent to 12.5 percent, the lack of indexation requires careful calculation to determine the actual tax impact.

Also Read- Budget 2024: Higher taxes for markets investors, F&O clampdown

The objective is to simplify capital gains taxation by reducing the LTCG tax rate to 12.5 percent and removing the indexation benefit. This change is intended to make capital gains calculations easier for both taxpayers and tax authorities.

How the Indexation Removal Affects Real Estate Investors

The elimination of indexation benefits poses a challenge for long-term real estate investors. Without this adjustment, taxable capital gains are likely to rise, increasing the tax burden on property sales. This could reduce net profits and potentially deter investment in real estate, especially for those who have held properties for an extended period where inflation has had a greater impact.

New Tax Relief for Multiple Properties and Short-Term Rentals

Under the new tax rules, individuals can now designate up to two properties as self-occupied. This change is advantageous for homeowners with multiple properties or those renting out homes on short-term platforms like Airbnb, providing relief and simplifying tax management.

Increased Long-Term Capital Gains Tax on financial assets

The long-term capital gains tax (LTCG) has been raised from 10 percent to 12.5 percent across all financial and non-financial assets. Short-term capital gains (STCG) on specific assets will now be taxed at 20 percent. The exemption limit for LTCG has also increased from ₹1 lakh to ₹1.25 lakh. The Budget clarifies that listed financial assets held for over a year will be deemed long-term, while unlisted financial assets and non-financial assets must be held for at least two years to qualify.

Also Read- Budget 2024 is a quest for equitable growth: CRISIL

I see these changes may create concerns about potential future tax increases, but it’s essential to remember that equity gains could offset some of these taxes. Equity mutual funds remain a compelling investment option. As I always say, “Death and taxes are certain,” so focusing on increasing income and controlling what you can is key.

Budget 2024 Highlights: STT Hike and NPS Enhancements

STT Increase for Futures and Options:

Futures and Options (F&O) traders will face a significant tax increase as the Security Transaction Tax (STT) rises from 0.01 percent to 0.02 percent. This adjustment will effectively double the tax on equity and index trades.

Boost in NPS Tax Deductions:

The deduction limit for employer contributions to the New Pension Scheme (NPS) is set to rise from 10 percent to 14 percent. This enhancement will benefit both public and private sector employees, aligning their tax advantages with those of government employees.

Introduction of NPS Vatsalya for Minors:

The new NPS Vatsalya scheme allows parents to contribute to a minor’s NPS account, which will convert to a regular NPS plan upon the child’s 18th birthday. This scheme fosters early financial discipline and seamlessly transitions to a standard NPS plan.

Changes to Buyback Taxation and Reporting Requirements

Buybacks Taxed as Dividends:

Starting October 1, buybacks will be taxed as dividend income, significantly reducing their appeal to investors. This proposal may alter investment strategies, making buybacks less attractive compared to before.

Relaxed Penalties for Foreign Assets:

The Budget introduces a relaxation in penalties for not reporting foreign assets up to ₹20 lakh. This change aims to ease the burden on small taxpayers who may have inadvertently overlooked reporting overseas assets.

Eased TDS for Salaried Employees:

From October 1, salaried employees will benefit from reduced Tax Deducted at Source (TDS) as they can now declare Tax Collected at Source (TCS) to their employers. This update will help manage cash flow better and allow any refunds due to be adjusted directly against TDS.

These changes bring both challenges and opportunities. The shift in buyback taxation may prompt investors to reconsider their strategies, while relaxed penalties and adjusted TDS rules offer significant relief to taxpayers. It’s crucial to stay informed and adapt to these updates to optimise your financial planning.

The writer is a Chartered Accountant and founder of NRP Capitals.

The thoughts and opinions shared here are of the author.

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Finance

Bajaj Finance shares fall as Q1 earnings miss estimates, here’s what brokerages say

Published

18 hours ago

July 24, 2024

Press Room

Bajaj Finance shares fall as Q1 earnings miss estimates, here’s what brokerages say

Shares of Bajaj Finance fell over 2% in early deals on Wednesday after the NBFC reported its Q1 earnings. Net profit in the June 2024 quarter climbed 14% rose to Rs 3,912 crore in Q1 against Rs 3,437 crore in the June 2023 quarter. Revenue for the quarter stood at Rs 16,098 crore in Q1 against Rs 12,497 crore in the June 2023 quarter.

The stock slipped 2.55% to Rs 6560 on Wednesday. Market cap of Bajaj Finance slipped to Rs 4.08 lakh crore. Total 0.40 lakh shares of the firm changed hands amounting to a turnover of Rs 26.23 crore on BSE.

Track Budget 2024 updates real-time with BT’s non-stop live streaming of India’s most-important event from 8 am to 7 pm

Bajaj Finance’s relative strength index (RSI) stands at 35.4 which signals the stock is neither oversold nor overbought. A level below 30 is defined as oversold while a value above 70 is considered overbought. Bajaj Finance stock has a one-year beta of 0.9, indicating low volatility during the period

Motilal Oswal has maintained its neutral stance post Q1 earnings. It assigned a price target of Rs 7,500 , up 11% against the previous close.

“We cut our FY26 PAT estimate by 3% to factor in higher steady-state normalized credit costs. We estimate a CAGR of 27%/24% in AUM/PAT over FY24-FY26 and expect Bajaj Finance to deliver RoA/RoE of 4.2%/22% in FY26. Despite a healthy PAT CAGR of 24% over FY24-FY26E and RoA/RoE of 4.2%/22% in FY26E, we see limited upside catalysts. Consequently, we maintain our Neutral rating on the stock with a price target of Rs 7,500 (premised on 4.2x FY26E BVPS),” said the brokerage.

Global brokerage firm Jefferies retained its ‘Buy’ rating on Bajaj Finance but trimmed its price target to Rs 7,780 from Rs 9,260 earlier. Jefferies said profit missed street expectations. A sharper rise in credit costs, climbing to 2.3% of average AUM (adjusted for the utilisation of reserves) was a major drawback.

Citi also cut its price target on Bajaj Finance to Rs 8,275 but retained its ‘Buy’ rating on the stock.

Bajaj Finance’s core earnings missed expectations as NIMs fell 23 basis points as against 30-40 bps guided for the first half. Additionally, the credit cost was elevated at 2%, compared to 1.75-1.85% guidance, said Citi.

Meanwhile, total expenses climbed to Rs 10,839.48 crore in the last quarter against Rs 7951 crore in the corresponding quarter of the previous year.

Assets under management (AUMs) climbed 31% to Rs 3.54 lakh crore in Q1 compared to Rs 2.70 lakh crore in Q1 of FY24.

New loans booked climbed 10% to 1.09 crore against 0.94 crore in the June 2023 quarter.

The company resumed sanction and disbursal of loans under ‘eCOM’ and ‘lnsta EMI Card’ and issuance of EMI cards after the RBI removed the restrictions on these businesses on 2 May 2024.

Customer franchise stood at 88.11 million as of 30 June 2024 as cornpared to 72.98 million as of 30 June 2023, a growth of 21 %. The company’s customer franchise grew 4.47 million in Q1 FY25.

Net interest income increased by 25% in Q1 FY25 to Rs 8,365 crore from Rs 6,717 crore in Q1 FY24.

Gross NPAs and Net NPAs as of June 30, 2024 stood at 0.86% and 0.38% respectively as against 0:87% and 0.31 % as of June 30, 2023. The company has provisioning coverage ratio of 56% on stage 3 assets.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.