Whalesbook
ShaliBhadra Finance Limited's Board of Directors has approved the private placement of senior, secured, non-convertible debentures (NCDs) totaling ₹19.50 crore. The NCDs will carry an annual coupon rate of 12%, with interest payable monthly. The company plans to list these debentures on the BSE to enhance marketability and liquidity.
This move signals ShaliBhadra Finance's strategy to raise capital directly from debt markets, diversifying its funding beyond traditional banking. The raised funds are earmarked to strengthen the company's liquidity and support its ongoing lending operations, particularly in its core areas of two-wheeler and other retail financing.
The debentures are secured by a first-ranking charge on the company's loan receivables and book debts, supported by a promoter personal guarantee. While this NCD issuance will boost capital for expansion, it will also increase the company's debt servicing obligations and alter its capital structure, requiring careful management.
Company Background
ShaliBhadra Finance, established in 1992 and listed on the BSE since 1995, operates as a Non-Banking Financial Company (NBFC). It primarily serves rural and semi-urban populations across Gujarat, Maharashtra, and Madhya Pradesh. The company's business focuses on financing two-wheelers, auto-rickshaws, and consumer durables. It has been expanding its network and offerings, including financing for used three/four-wheelers.
In FY25, ShaliBhadra successfully raised about ₹46 crore in equity. Its loan book grew by a significant 31% year-on-year to ₹180 crore by the end of FY25. This growth was supported by a strong capital adequacy ratio and manageable gearing. The company also holds a BBB- (Stable) rating from ICRA and is in the process of obtaining an HFC license.
Key Implications
The approval means ShaliBhadra Finance's total debt will increase by ₹19.50 crore, influencing its leverage ratios. The infused capital will enhance liquidity for new lending and business growth. The planned BSE listing offers investors a regulated trading platform. This issuance diversifies the company's funding sources.
Potential Risks
ShaliBhadra Finance faces several risks. Fluctuations in interest rates could impact its borrowing costs and profitability. Managing a higher debt burden requires consistent cash flow to meet monthly coupon payments. The company's focus on two-wheeler financing and lending to a potentially weaker customer profile carries inherent credit risks. Adverse economic conditions could also affect borrower repayment capacity.
Competitive Landscape
ShaliBhadra Finance operates within the competitive NBFC sector. Larger players like Muthoot Finance and Shriram Finance have diversified portfolios and broader market reach. Bajaj Finance is a major competitor in consumer durable financing. At a similar scale, companies such as Mangal Credit and Fincorp focus on retail and vehicle financing for underbanked populations.
Financial Snapshot
As of March 31, 2025, ShaliBhadra Finance's loan book stood at ₹180 crore, marking a 31% YoY increase. The company reported a Net Worth of ₹159 crore as of June 30, 2025, with a Capital Adequacy Ratio (CAR) of 87.0% and gearing at 0.2x. Gross Non-Performing Assets (NPAs) were 2.9% as of March 31, 2025. For the third quarter of FY2026, revenue rose 13.3% year-on-year to ₹11.16 crore, and net profit increased by 6.79% to ₹5.03 crore.
Looking Ahead
Investors will be watching for the finalization of the NCD terms, including tenor. The successful completion of the private placement and the official listing on the BSE are key next steps. The company's deployment of the raised capital and its impact on profitability and leverage will also be closely monitored.