Real Touch Finance Secures ₹2.56 Cr Capital Via NCDs, Clears ₹3.48 Cr Bad Debts

Real Touch Finance Limited is set to raise ₹2.56 crore via secured, redeemable non-convertible debentures (NCDs) through private placement. The company's board also approved writing off ₹3.48 crore in outstanding receivables deemed uncollectible.

Today’s Board Decisions

Real Touch Finance Limited's Board of Directors convened on March 20, 2026, sanctioning two significant financial actions.

The company approved the issuance of ₹2.56 crore in secured, redeemable NCDs. These debentures will carry a fixed annual coupon rate of 9.50% and mature in 3 years from their allotment date.

Separately, the board also sanctioned the write-off of ₹3.48 crore in outstanding receivables, which management has identified as unrecoverable after a thorough assessment.

Why This Matters

The NCD issuance is a strategic step to secure debt capital, funding Real Touch Finance's lending operations and supporting growth for the non-banking financial company (NBFC).

However, the write-off of ₹3.48 crore in receivables, representing about 12.05% of the company's total turnover (₹28.89 crore), signals potential challenges in asset quality or collection efficiency, even if management classifies it as a manageable, one-time adjustment.

Company Background

Real Touch Finance is a registered non-banking financial company (NBFC) with over two decades of experience, offering personal loans, loans against property, and business loans primarily in Tamil Nadu.

In July 2025, Infomerics Ratings assigned 'IVR BBB/Stable' to its long-term borrowings, citing strong capitalization, healthy asset quality, and experienced promoters. As of March 2025, its Capital Adequacy Ratio (CRAR) was a robust 25.81%, well above regulatory norms. Gross Non-Performing Assets (NPA) stood at 1.06% and Net NPA at 0.74%.

However, an analysis in January 2026 from MarketsMojo flagged the company with a 'Strong Sell' rating, citing below-average quality metrics, a sharp decline in quarterly profit, and a low interest coverage ratio. The company has a history of substantial debt raising, with FY25 alone seeing ₹5,477.06 crore availed in long-term borrowings.

What This Means for the Company

• Enhanced debt capital is now available to fund lending activities.
• A direct reduction in current reporting period profitability due to the write-off.
• The Board of Directors has formally approved these financial actions.
• A potentially cleaner balance sheet post-write-off, assuming no further issues emerge.

Potential Risks

• The ₹3.48 crore write-off, representing about 12% of turnover, could signal underlying weaknesses in asset quality or credit appraisal processes if it becomes a recurring trend.
• Increased financial leverage and interest payment obligations from the new NCD issuance.
• Concerns raised by MarketsMojo about weak fundamental strength, low interest coverage, and a 'Strong Sell' rating, suggesting potential financial strain.

Comparison to Peers

Major NBFC players like Bajaj Finance and L&T Finance regularly access debt markets via NCDs and other instruments to fund their extensive lending operations. While Real Touch Finance is raising a smaller amount, its capital augmentation strategy aligns with industry norms. However, its substantial write-off contrasts with the robust asset quality management typical of larger, more diversified peers who benefit from scale and broader market reach.

Key Financial Metrics

• Capital Adequacy Ratio (CRAR) was 25.81% as of March 31, 2025 (FY25).
• Gross NPA was 1.06% and Net NPA was 0.74% as of March 31, 2025 (FY25).
• Assets Under Management (AUM) stood at ₹227.53 crore as of March 31, 2025 (FY25).

What to Watch

• The terms and successful completion of the ₹2.56 crore NCD private placement.
• Management commentary on asset quality, the reasons for the specific write-offs, and future recovery strategies.
• The immediate impact of the ₹3.48 crore write-off on the company's reported profit and loss this quarter.
• Monitoring for further deterioration or improvement in asset quality metrics in subsequent financial reports.
• How the additional debt capital raised via NCDs will be deployed to generate returns.