GP Petroleums plans to raise ₹130 crore through debt instruments from RevX Special Credit Opportunities Fund II to support expansion and working capital. The deal includes non-convertible and optionally convertible debentures carrying a 13% annual coupon rate. Investors should note the potential for equity dilution upon conversion and the impact of the high financing cost on future profit margins.
GP Petroleums is set to raise ₹130 crore through a private placement of debt instruments, a move the company says will support its business expansion and optimize working capital. The board of directors has approved the fundraising initiative, which will be sourced from the RevX Special Credit Opportunities Fund II.
The financing package is divided into two separate debt instruments. The company will issue ₹30 crore in non-convertible debentures (NCDs) with a maturity period of 36 months. Additionally, the firm will issue ₹100 crore in optionally convertible debentures (OCDs), which have an 18-month tenure. Both instruments carry a 13% annual coupon rate, which is paid quarterly, and include an additional 1.5% upfront coupon on allotment.
A key aspect for shareholders is the conversion feature tied to the OCDs. These debentures can be converted into equity shares at a price of ₹62.09 per share, subject to necessary shareholder and statutory approvals via a postal ballot. If the option is exercised, it could lead to equity dilution for existing shareholders, effectively increasing the company’s share base.
This capital raise follows a period of strong financial performance for the company. In the first quarter of fiscal year 2027, GP Petroleums reported a 220% year-on-year increase in its standalone net profit, reaching ₹20.6 crore, while revenue grew by 46%. The company aims to use the new liquidity to sustain this growth trajectory and pursue market opportunities that require capital beyond its current internal cash flow.
Investors may monitor the impact of this debt on the company’s financial health. While the funds provide immediate liquidity, the 13% annual interest rate represents a significant cost of capital. Profit margins could come under pressure if the returns from the planned expansion projects do not outperform the cost of servicing this debt. As of October 2, 2026, the company’s stock was trading at ₹62.45. The next important update for shareholders will be the outcome of the shareholder vote regarding the OCD conversion and the subsequent deployment of these funds into expansion projects.