Tikona Communication Limited, formerly Grand Foundry Ltd, has approved the issuance of secured, unlisted non-convertible debentures worth Rs 99.19 crore to fund its acquisition of a 62.01% stake in Tikona Infinet Private Limited. The acquisition consideration will be funded largely through NCDs, with a nominal cash payment. The company has also deferred a proposal to raise funds through equity shares or convertible warrants.
Tikona Communication approves Rs 99.19 crore NCD issue for Tikona Infinet acquisition
NCD Issue Size: Rs 99.19 crore
Acquisition Stake: 62.01% in Tikona Infinet Private Limited
Reader Takeaway: Acquisition financing advances, but completion still depends on approvals.
What just happened
Tikona Communication Limited, formerly known as Grand Foundry Ltd, has approved the issuance of secured, unlisted non-convertible debentures (NCDs) aggregating Rs 99.19 crore.
The NCD issue will fund the company's proposed acquisition of a 62.01% equity stake in Tikona Infinet Private Limited (TIPL), a transaction that had been announced earlier.
The total acquisition consideration is Rs 99,22,00,380. This will be discharged through two tranches of secured NCDs along with a cash payment of Rs 3,00,380.
Why this matters
The approval moves the acquisition financing closer to completion and indicates the company is proceeding with its inorganic growth strategy.
Rather than relying on fresh equity, the company has chosen debt funding through secured NCDs, limiting immediate equity dilution.
The backstory
The acquisition is being executed under a previously signed Share Purchase Agreement.
Completion remains subject to applicable conditions precedent and required approvals, including shareholder approval for the related party transaction.
What changes now
The approved funding structure consists of:
- Rs 86.80 crore through 36-month secured NCDs carrying a 1% annual coupon.
- Rs 12.39 crore through 12-month secured NCDs carrying a 6% annual coupon.
- Cash payment of Rs 3,00,380.
The NCDs will be secured through a mortgage, charge or pledge over assets of SAR Televenture Limited with security valued at approximately Rs 99.19 crore.
Interest will be paid annually, while principal repayment will take place on maturity.
The board also considered raising funds through equity shares or convertible warrants but decided to defer that proposal for future consideration.
Risks to watch
The acquisition remains conditional on shareholder approval for the related party transaction and satisfaction of other transaction conditions.
Investors should also monitor future funding plans if the deferred equity or warrant proposal is revived.
What to track next
Key milestones include shareholder approval for the related party transaction, completion of the acquisition of the 62.01% stake in TIPL, issuance of the approved NCDs and any future fundraising decisions by the board.