Raising of funds through NCDs and other debt Securities on private placement basis for an amount not exceeding Rs. 250 Crores.
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Sakthi Finance's board has approved raising up to Rs. 250 crore through Secured Redeemable Non-Convertible Debentures (NCDs), Commercial Papers, and other debt securities on a private placement basis, with a coupon of up to 12% per annum and tenure of up to 10 years. These will be secured against hire purchase receivables and immovable properties and proposed to be listed on BSE. Additionally, the board approved issuing Redeemable Cumulative Preference Shares up to Rs. 20 crore (up to 12% coupon, 20-year tenure, unlisted). The board also appointed two new Independent Directors for 5-year terms, re-appointed the Managing Director for another 5 years from September 29, 2025, and proposed increasing authorised share capital from Rs. 130 crore to Rs. 150 crore. All proposals require shareholder approval at the upcoming AGM.
The company is significantly expanding its borrowing capacity to support lending operations, but the high coupon rate of up to 12% signals elevated borrowing costs that could pressure margins. Existing equity shareholders may face slight dilution risk from the increased authorised capital and preference share issuance, though no immediate equity dilution is announced.