Kerala Ayurveda Approves ₹40 Crore Secured NCD Issuance at 12% Interest

Kerala Ayurveda is set to raise ₹40 crore via secured, redeemable Non-Convertible Debentures (NCDs) at an annual interest rate of 12%. The company's Board of Directors approved the private placement of 4,000 Series "A" NCDs.

Reader Takeaway: Debt raised at 12% secured by properties; declining profits pose a payment risk.

Key Filing Details

Kerala Ayurveda Limited's Board of Directors has approved the issuance of 4,000 Series "A" unlisted, secured, and redeemable Non-Convertible Debentures (NCDs). The total aggregate amount of this private placement is ₹40,00,00,000 (₹40.00 crore).

The NCDs will carry an interest rate of 12% per annum and have a tenure of up to 10 years. The issuance is secured by a first charge on specific industrial properties of the company.

This issuance falls within the borrowing limits previously approved by shareholders. Allotment is expected within one month of the board meeting.

Why This Matters

This debt issuance gives Kerala Ayurveda access to capital for its operations. Securing the NCDs with industrial properties aims to make the offering more attractive to investors and secure better terms.

The 12% interest rate represents the cost of this borrowing. The company's ability to manage these new debt payments is key, especially given its recent financial performance.

Company Background

Kerala Ayurveda is a full-spectrum Ayurvedic wellness company engaged in producing and selling Ayurvedic products and providing healthcare services, including clinics, hospitals, and resorts.

In December 2025, shareholders approved creating charges on company assets up to ₹250 crore and authorized financial operations up to ₹100 crore, enabling this type of fundraising.

Previously, the company received ₹21.2 crore via preferential allotment in January 2024 and completed another preferential equity share allotment on March 21, 2026, involving debt conversion and subsidiary acquisition.

However, Kerala Ayurveda's finances show challenges. Net debt has been increasing, and profitability is declining. The company also settled with SEBI, indicating prior regulatory issues.

What Changes Now

• The company gains additional debt funding, potentially boosting liquidity.
• Specific industrial properties are now pledged as security for these NCDs.
• Debt repayment obligations will rise, demanding careful financial management.

Risks to Watch

• A 2% penalty applies if interest or principal payments are delayed by more than three months from the due date.
• Declining profits and rising net debt risk the company's ability to meet its growing debt payments.
• Although secured, a default could result in the company's pledged properties being claimed.

Peer Comparison

Kerala Ayurveda's market capitalization of about ₹222 crore (as of February 2026) is similar to its peers' median. However, Kerala Ayurveda is seen as weaker financially than competitors, with a weaker balance sheet and lower Altman Z-score. Key rivals include Sun Pharma, Dr. Reddy's Laboratories, and Ayurveda-focused firms like Kama Ayurveda.

Context Metrics

None available.

What to Track Next

• Track the ₹40 crore NCD allotment within the next month.
• Watch the company's financial performance and its ability to meet payments on this new debt, given falling profits.
• Look for announcements on how these funds will be used.
• Monitor any developments concerning the SEBI settlement.
• See management's plan to boost profits and handle the growing debt.