Board considered and approved issue of non convertible debentures.
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The Board of Regency Fincorp Ltd approved the issuance of Secured, Rated, Listed Non-Convertible Debentures (NCDs) worth ₹25 Crore on a private placement basis, with 2,500 units of face value ₹1,00,000 each, to be listed on BSE. The NCDs carry a fixed interest rate of 14% per annum, payable monthly, with a 12-month tenure. Principal repayment is structured as 95% at the 6th month and 5% at the 12th month. The issuance is secured with a 1.25x security cover, and Infomerics Valuation and Rating has been appointed as credit rating agency, with Catalyst Trusteeship as debenture trustee.
This raises ₹25 Crore in debt funding for the company at a relatively high borrowing cost (14%), which will increase interest expenses. The short tenure with bullet repayment structure suggests the funds may be used for short-term funding needs. Existing equity shareholders are not diluted, but the high coupon rate indicates either higher risk or aggressive growth funding plans.