Kuantum Papers Ltd has raised Rs 100 crore via a private placement of unlisted, senior, secured non-convertible debentures. The issuance carries an effective annual yield of 12.70%, maturing in June 2030, and is backed by corporate and personal guarantees.
Kuantum Papers Secures Rs 100 Crore via NCD Issuance
Kuantum Papers Ltd has successfully finalized a Rs 100 crore fundraising exercise through the private placement of non-convertible debentures (NCDs). The issuance comprises 10,000 debentures with a face value of Rs 1,00,000 each, maturing on 2 June 2030.
Reader Takeaway: The firm secures fresh liquidity via debt, but faces a 12.70% annualized yield obligation through 2030.
What just happened
The company has issued unlisted, senior, secured NCDs to raise Rs 100 crore in capital. The structure includes a 9.70% monthly coupon and a 3.00% annual redemption premium, resulting in an effective yield of 12.70% per annum for investors. The allotment date was 3 September 2026.
Security Structure
To secure these instruments, Kuantum Papers has provided a security cover of 1.50x the redemption and coupon obligations. The collateral package includes:
- A subservient charge on current and movable fixed assets.
- Personal guarantees from Mr. Jagesh Kumar Khaitan and Mr. Pavan Khaitan.
- A shortfall undertaking from Kapedome Enterprises Limited.
- Cash collateral in the form of a lien-marked fixed deposit (5% of the total amount) held with Axis Trustee Services Limited.
Risks to watch
The debt obligation comes with specific trigger clauses. A credit rating downgrade will trigger an immediate 0.25% coupon hike per notch. Furthermore, the company faces a 2.00% per annum default penalty if interest or principal payments are delayed by more than three months. Shareholders should monitor the company’s operating cash flows to ensure these recurring monthly interest payments and the final 2030 redemption remain well-covered.