Akme Fintrade Raises Rs 50 Crore Via NCDs

Akme Fintrade (India) Limited will raise Rs 50 crore by issuing Non-Convertible Debentures (NCDs) through private placement. The approval came from the company's Loan & Investment Committee.

Reader Takeaway: Company secures debt funding; shareholders should monitor leverage.

What just happened

Akme Fintrade announced its plan to raise up to Rs 50 crore through the issuance of Non-Convertible Debentures (NCDs). The NCDs will be issued in two series, A1 and A2, each for Rs 25 crore. These are described as listed, rated, senior, secured, transferable, and redeemable instruments. The company intends to list these NCDs on the NSE.

Why this matters

This move allows Akme Fintrade to access capital from the debt market, likely to fund its lending operations or other business requirements. For investors, it signifies the company's strategy to manage its liquidity and growth through debt financing.

The backstory

Akme Fintrade (India) Limited is a non-banking financial company (NBFC) involved in providing loans and advancing business. The company has previously raised funds through various debt instruments to support its growth.

What changes now

The infusion of Rs 50 crore will enhance the company's financial resources, potentially enabling it to expand its loan book or meet its operational expenditures. The NCDs will carry specific terms regarding interest rates, tenure, and security.

Risks to watch

Penalties are stipulated for payment defaults or covenant breaches, including an additional 2% per annum interest over the coupon rate. This highlights the importance of timely payments and adherence to terms by the company.

Peer comparison

Many NBFCs in India regularly tap the debt markets to raise funds for their lending businesses. The terms and security offered for these NCDs will be a key factor for investors to compare against similar offerings in the market.

Context metrics (time-bound)

Total issuance size: Rs 50 crore.
Series A1: Rs 25 crore.
Series A2: Rs 25 crore.
Security cover: Minimum 1.10x over loan receivables.

What to track next

Investors should monitor Akme Fintrade's leverage ratios, the performance of its loan portfolio, and its ability to service this new debt. The successful listing and trading of these NCDs on the NSE will also be points to watch.