Key Highlights:
- Issue Size: Base issue of ₹5,000 lakh, with a Green Shoe option to retain oversubscription up to ₹5,000 lakh, aggregating up to ₹10,000 lakh.
- Instrument: Listed, Rated, Secured, Redeemable Non-Convertible Debentures (NCDs) of face value ₹1,000 each.
- The Company has filed prospectus dated 17 February 2025(Prospectus) with Registrar of Companies Maharashtra at Pune and submitted a copy to BSE Limited.
- Issue Opens: 28 February 2025 for maximum period of 10 working days. Allotment on first come first served basis and thereafter in case of oversubscription proportionate allotment of the NCDs to the applicants from the date of oversubscription. The company reserves the right to close the issue earlier with advertisement in all the newspapers in which pre-issue advertisement for opening of the issue has been given on or before such earlier or initial date of Issue closure.
- Mode of Issuance & Trading: NCDs will be issued and traded in dematerialized form only.
- Credit Rating: Rated BBB-/Stable by CRISIL, indicating a moderate degree of safety regarding timely servicing of financial obligations and such securities carry moderate credit risk.
- Listing: Proposed on BSE Limited within 6 working days of issue closure date.
- Minimum Subscription: 75% of the base issue size (₹3,750 lakh).
Fund Utilization:
- Minimum 75% for the purpose of onward lending, investments in current and future AIF schemes of our alternate asset management business managed by our subsidiary Prachay Investment Managers Private Limited, repayment/ pre-payment, in full or in part, of certain outstanding borrowings availed by our Company.
- Maximum 25% for general corporate purposes.
Security & Collateral:
- Secured by first ranking paripassu charge with existing secured creditors/lenders, on all present and future loan receivables, receivables from investment in debentures, receivables from investments in the units of AIFs, balance with banks, fixed deposits and any other present and future receivables.
- Security Cover: Minimum 100% ofthe outstanding principal and interest due thereon at all times.
Tenor:
- 5 years (i.e.,1826 days)*
*Subject to exercise of call option by the Companyat any time after the period of 1 (one) year from the Deemed Date of Allotment of NCDs under the terms of the Prospectus
Redemption & Default Terms:
- Monthly coupon payments + Principal repayment at maturity, if no call option is exercised by the Company under the terms of the Prospectus.
- Default Interest Rate: 2% p.a. over the coupon rate for the defaulting period.
Lead Managers & Issue Partners:
- Lead Manager: Galactico Corporate Services Limited
- Debenture Trustee: Catalyst Trusteeship Limited
- Registrar to the Issue: KFin Technologies Limited
- Legal Counsel: Khaitan & Co.
Ahmedabad, 18 Feb 2025:Prachay Capital Limited, an RBI-registered Non-Banking Financial Company – Investment and Credit Company (NBFC-ICC), has announced the public issue of its Secured, Rated, Redeemable Non-Convertible Debentures (NCDs) to raise up to ₹10,000 lakh.
The BBB-/Stable CRISIL-rated NCDs offer investors a 13% p.a. return with monthly interest payments, making it a fixed-income investment opportunity.The proceeds from this issue of NCDs will be primarily used for the stated fund utilization.
Prachay Capital has zero delays in servicing liabilities and has Gross NPA of 0% on its Assets Under Management (AUM). The Company’s AUM has grown at a CAGR of 46.61% from ₹ 13,291.94 lakh as at March 31, 2022 to ₹ 28,569.77 lakh, as at March 31, 2024 and has return on equity (ROE) above 17% post tax over the last three financial years.The Company’s Net Interest Margin (NIM) for the last three financial years ending on March 31, 2024, March 31, 2023 and March 31, 2022 stood at 8.40%, 9,49% and 11.02%, respectively and Company’s Return on Total Assets (ROTA) have been in range of 4% to 5% for the same period. As on quarter and six months period ended September 30, 2024, the Company’s Capital Risk Adequacy Ratio (CRAR) was27.32%.
With BSE listing, the issue is open for subscription byretail individual investors, high-net-worth individual investors (HNIs), institutional investors, and corporates.For details relating to eligible investors, see “Issue Structure” beginning on page 189 of the Prospectus.
In the first half of fiscal 2025, 607 different issuers tapped the corporate bond market, issuing bonds totalling Rs 5.11 lakh crore. In the fiscal 2025, the corporate bond market saw 200+ new issuers, reflecting growing confidence and participation in the debt market. Moreover, AAA-rated corporate bonds dominated the bond market with ~67% issuances in the first half of fiscal 2025.
Issue Structure & Payment Terms
- Coupon Rate – 13% p.a.
- Payment Frequency: Monthly – As per “Issue Structure – Specific Terms of NCDs” (Page 189 of the Prospectus).
- Interest Calculation: Based on actual day count convention.
- Call Option: Company has right (but no obligation) to redeem outstanding NCDs (fully or partially), at any time after the period of 1 (one) year from Deemed Date of Allotment of NCDs, with a notice of atleast 21 days before exercising such call option.
- Record Date: 15 days before the interest or redemption payment date.
- Application Money: Full amount payable at the time of application.
- Governing Law & Jurisdiction: The issue is governed by Indian law, and legal matters fall under the exclusive jurisdiction of Pune, Maharashtra.
We cater to the finance needs of medium and large business through corporate credit and corporate bonds.. Our lending is secured by movable/immovable assets and cash flows.
The company operates across two key financial segments:
- Corporate Credit (83.40% of AUM as at September 30, 2024):Focus is on identifying the specific financial needs and the business objective to be achieved by the borrowings and structure a financial arrangement such that the infusion of debt funds would result in achieving business objective of our clients and will result in cashflows which will ultimately be the source of repayment for the borrowing.
- Corporate Bonds – Unlisted, Privately Placed NCDs (16.60% of AUM as at September 30, 2024):Lending to corporates in the form non-convertible debentures instead of traditional loans. The compliance process of unlisted, privately placed NCDs is relatively simpler and provides significant flexibility to businesses to raise funds in the manner that best suits their business models.
We have a long term and sustainable business model which offer unambiguous value propositions to all our stakeholders. For our debt investors, we offer fixed and periodic returns which are higher than traditional debt investment opportunities such as fixed deposits, liquid mutual funds etc. For our borrowers, we provide fast and flexible financial solutions to medium to large-sized localised businesses. For our employees, we provide the opportunity to work in the field of business finance and create innovative, mutually beneficial financial solutions and structures in an organisation that supports the holistic growth of an individual.
Our wholesale corporate lending model is scalable, enabling us to expand our product offerings and increase our geographical base.
Capitalised terms not defined herein shall have the same meaning as assigned to such terms in the Prospectus.
