Supreme Infrastructure Approves ₹75 Crore NCD Issuance

Aggregate limit of ₹75 crore approved; first tranche of ₹28 crore finalized for subscription.

Reader Takeaway: The company is aggressively leveraging land assets for debt, though the 20% coupon rate signals high borrowing costs.

What just happened

The Board of Directors of Supreme Infrastructure India Limited has greenlit a plan to raise up to ₹75 crore via Non-Convertible Debentures (NCDs). The company has already detailed the terms for the initial ₹28 crore tranche, which is being issued to INRE FUND II on a private placement basis. These debentures are unlisted, dematerialized, and set for a tenure of 366 days.

Why this matters

The issuance provides immediate liquidity, but the financial terms are notable. The 20% per annum coupon rate is significantly higher than conventional bank borrowing rates, reflecting the company's current risk profile or urgency in capital requirements. Investors should view this as a direct link to the company's asset-monetization strategy, specifically involving the utilization of land assets.

Risks to watch

The primary concern for shareholders is the high interest burden. A 20% coupon rate will impact the company's bottom line and cash flow in the coming year. Additionally, the security of the debt is tied to specific land in Bhiwandi; the success of this strategy depends heavily on the company's ability to eventually monetize this property and meet its repayment obligations.

What to track next

Watch for future disclosures regarding how the remaining ₹47 crore of the authorized ₹75 crore limit will be deployed and whether subsequent tranches mirror these high-interest terms. Progress on the actual monetization of the Bhiwandi land parcel remains the critical indicator of the company's ability to deleverage.