Regency Fincorp Announces Rs 75 Crore NCD Issuance

• Issue Size: Rs 75 crore
• Interest Rate: 13% per annum (monthly payout)

Reader Takeaway: The 13% coupon and 1.35x security cover define the cost of debt and asset backing for investors.

What just happened

Regency Fincorp has formally approved the issuance of 75,000 Non-Convertible Debentures (NCDs) with a face value of Rs 10,000 each. The total corpus of Rs 75 crore is divided into a base issue of Rs 25 crore and a green shoe option of Rs 50 crore. The instrument is secured, rated, and slated for listing.

Why this matters

This capital-raising exercise provides the company with structured debt funding over a 30-month horizon. The specific interest and repayment structure offer transparency for investors regarding the company's liquidity obligations. The company has mandated Catalyst Trusteeship Limited as the trustee and Horizon Management Private Limited as the merchant banker for this issuance.

Terms of the Instrument

The NCDs offer a 13% annual interest rate paid on a monthly basis. The principal repayment is structured to provide staggered outflows: 30% after 18 months, 30% after 24 months, and the final 40% upon maturity at the end of 30 months. A penal interest rate of 3% above the coupon will trigger if payments are delayed beyond three months.

Security and Compliance

The debt is backed by a security cover of 1.35x. This collateral consists of a mix of secured and unsecured principal loan receivables, with the firm emphasizing that these assets currently maintain a 0 days past due (DPD) status. Monitoring the quality of this underlying loan book remains essential as the repayment schedule progresses.