Submission of Outcome of Board Meeting held on 02ND June 2026.
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Regency Fincorp Ltd's board, at its meeting on June 2, 2026, approved the allotment of 1,000 listed, secured, rated, redeemable non-convertible debentures (NCDs) aggregating to INR 10 crores through private placement to a single identified investor, LC Venture Debt Fund. Each NCD has a face value of INR 1 lakh and carries a 15% annual coupon, with a 19-month tenor maturing on January 1, 2028. Both interest and principal will be repaid monthly over the tenure, with each monthly principal instalment at approximately INR 52.6 lakhs. The NCDs are secured by a 1.25x exclusive charge on the company's loan receivables, with a step-up to a first-ranking pari-passu charge on current and fixed assets if the cover drops below 1.25x. A 2% per month penalty applies on any overdue amounts.
The company is raising INR 10 crores in debt rather than equity, so there is no share dilution, but the 15% coupon is a high cost of borrowing that will increase interest expenses. Monthly principal repayments of roughly INR 52.6 lakhs create recurring cash flow obligations that must be serviced from the company's loan receivables, which also serve as collateral. Shareholders should watch the company's asset quality and cash collection performance, as any slippage in receivables could pressure its ability to meet these NCD obligations.