Apollo Tyres Raises Rs 500 Crore via NCD Issuance

Amount Raised: Rs 500 Crore | Coupon Rate: 7.81% per annum

Reader Takeaway: Routine debt-raising effort; fixed interest obligations secured by tangible fixed assets for 3-year tenure.

What just happened

Apollo Tyres Ltd has concluded the allotment of 50,000 secured, listed, rated, and redeemable Non-Convertible Debentures (NCDs) through a private placement. The fundraising exercise has successfully mobilized Rs 500 crore for the company.

Issuance Terms

The issuance is structured with a face value of Rs 1,00,000 per debenture. The debt carries an annual coupon rate of 7.81%, with interest payments scheduled annually. The tenure is approximately three years, with the final maturity date set for September 28, 2029. These securities are slated for listing on the National Stock Exchange (NSE).

Security and Redemption

To secure the interests of debenture holders, the company has provided a first pari-passu charge on its tangible movable fixed assets, covering both current and future holdings. The company is contractually obligated to maintain a security cover of 1.25x based on the book value of these assets. The redemption structure follows a bullet repayment model, where the principal will be repaid in full upon maturity.

What this means for investors

This capital-raising activity is a standard treasury function for a major manufacturing firm. By utilizing NCDs, Apollo Tyres is optimizing its debt portfolio to support its ongoing capital requirements. Shareholders should view this as a planned financial adjustment rather than a structural change in the company's operations or market outlook.