IndoStar Capital Finance has allotted 40,000 senior, secured, redeemable, rated, listed, taxable, non-convertible debentures (NCDs) on a private placement basis. The total size of the issue is ₹400 crore, comprising two series of NCDs with a face value of ₹1,00,000 each. The Borrowing Committee approved the allotment via Circular Resolution #04/2026-27 dated July 23, 2026.

Allotment Details

The NCDs are issued under two series: 9.15% ICFL 26-27/SERIES XXXIV and 9.15% ICFL 26-27/SERIES XXXV. Both series carry a coupon rate of 9.15% per annum. The securities will be listed on the negotiated trade reporting platform of the National Stock Exchange of India Limited.

Tenor and Redemption

The tenor for Series XXXIV is 25 months, maturing on August 23, 2028. Series XXXV has a tenor of 28 months, maturing on November 23, 2028. Interest payments are scheduled annually, with principal repayment due upon maturity.

Security Structure

The NCDs are secured by a first pari-passu charge over the company's portfolio of assets or receivables not more than 90 days overdue, along with cash and cash equivalents. This charge is shared with banks, financial institutions, and other lenders providing credit facilities to the company.

IndoStar Capital Finance Limited reported a net profit of ₹13,020 lakh for the financial year ended March 31, 2026, compared to ₹5,259 lakh in the previous year, driven by exceptional gains from the divestment of a subsidiary. The company has set a strategic target to achieve a 35% compound annual growth rate (CAGR) in disbursements and aims for a profit after tax of ₹450 crore to ₹500 crore by FY29. This guidance was provided during the analyst call held on May 28, 2026, where management outlined a three-year framework focused on high-quality growth and portfolio quality.

Operational and Financial Highlights

Assets Under Management (AUM) stood at ₹8,056 crore as of March 31, 2026, registering a 5% increase compared to the previous quarter. Disbursements for Q4FY26 stood at ₹1,306 crore, reflecting a 17% sequential growth over Q3FY26 and 21% growth over Q4FY25. The weighted average cost of funds declined to 10.2% in Q4FY26 from 11.0% in Q4FY25, an improvement of 80 basis points. The company noted that April and expected May disbursements are tracking a robust 40% year-on-year growth.

Financial Performance

The company recorded an exceptional gain of ₹1,17,595 lakh during the year from the sale of its shareholding in Niwas Housing Finance Limited. For the quarter ended March 31, 2026, the company reported a net loss of ₹42,396 lakh, compared to a net profit of ₹124 million in the same quarter of the previous year. This quarterly loss was primarily due to an impairment of ₹51,727 lakh on financial instruments and an additional management overlay of ₹4,900 lakh related to the regional crisis in West Asia. Q4 revenue stood at ₹3.5 billion, compared to ₹3.7 billion in the same quarter of the previous year. Total income for the year stood at ₹1,39,359 lakh, while total expenses were ₹2,27,034 lakh.

Asset Quality and Provisions

The Gross Non-Performing Assets (GNPA) ratio stood at 4.77% as of March 31, 2026, compared to 4.52% in the previous year. The Net Non-Performing Assets (NNPA) ratio improved to 2.09% from 2.46%. The Provision Coverage Ratio (PCR) on NPAs increased to 57.40% from 46.65% in the prior year. The company made an additional provision of ₹326.13 crore against Security Receipts (SRs), increasing the provision coverage ratio on SRs to 63% from 26% a year ago. Management indicated that the old book is running off fast and expects asset quality to stabilize between 3.75% and 4%.

Strategic Initiatives

IndoStar Capital Finance strengthened its data science capabilities, with 44% of disbursements executed through straight-through processing. The branch network expanded to 454 across 24 states, with Micro LAP branches increasing to 108. The company received approval in May 2026 to undertake Aadhaar-based authentication (e-KYC) to enhance digital onboarding. Management highlighted a strategic pivot towards a high-growth, portfolio quality-focused framework, with diversification reducing MHCV disbursements from 57% in FY24 to 31% in FY26.

Regulatory Disclosures

The Board approved the Security Cover Certificate for listed non-convertible debentures aggregating to ₹2,88,489.51 lakh as of March 31, 2026. The company confirmed compliance with all financial covenants for its listed debt securities. The trading window for designated persons and their immediate relatives will open on June 1, 2026.