Unifinz Capital India Approves Rs 50 Crore NCD Issuance

Total Issue Size: Rs 50 crore (inclusive of Rs 30 crore green shoe option).
Coupon Rate: 11% per annum, paid monthly over a 15-month tenure.

Reader Takeaway: The NCD issue bolsters company liquidity, but investors should monitor the 11% cost of funds vs asset yields.

What just happened

Unifinz Capital India Ltd’s Asset Liability Management Committee approved the issuance of 50,000 senior, secured, listed, non-convertible debentures (NCDs) on a private placement basis. The total issue size stands at Rs 50 crore, which includes a base issue and a green shoe option of Rs 30 crore.

Why this matters

This capital-raising exercise is designed to strengthen the company’s liquidity position. With a fixed coupon rate of 11%, the company is locking in a specific cost of debt for a period of 15 months, maturing on January 08, 2028. These NCDs are slated for listing on the Wholesale Debt Market segment of the BSE, providing transparency for institutional and retail participation.

Security and Terms

To safeguard investor interests, the NCDs are backed by a first-ranking, exclusive charge on identified book debts and loan receivables. The company is contractually obligated to maintain a security cover of at least 1.10 times the aggregate outstanding amount throughout the tenure. In the event of a payment default, the coupon rate increases by an additional 4% until the dues are cleared.

Risks to watch

Investors should consider the debt-servicing implications of an 11% coupon rate. While the asset cover offers protection, the company’s ability to generate returns on these funds exceeding the borrowing cost remains a key monitorable for long-term financial health.

What to track next

The final deployment of the Rs 50 crore and subsequent updates on asset quality related to the hypothecated book debts are the next key milestones for shareholders.