Regency Fincorp Limited has approved the issuance of secured non-convertible debentures (NCDs) aggregating ₹50 crore to raise capital through private placement. The board, meeting on June 4, 2026, sanctioned 50,000 units with a face value of ₹10,000 each, comprising a base issue of ₹25 crore and a green shoe option of ₹25 crore. The instruments carry a coupon rate of 13.00% per annum, payable monthly, and are proposed to be listed on BSE Limited.

Key Terms of the Issue

The debentures have a tenure of 30 months from the date of allotment, which will occur upon the closure of bidding through an Electronic Book Provider. Principal repayment is structured in tranches: 30% at the end of the 18th month, 30% at the end of the 24th month, and the remaining 40% at maturity. The issue is secured with a cover ratio of 1.35x, primarily backed by secured receivables.

Board Appointments and Warrant Call

In conjunction with the NCD issuance, the board appointed Catalyst Trusteeship Limited as the debenture trustee and Horizon Management Private Limited as the merchant banker. Additionally, the directors approved a call for the balance 75% payment on convertible share warrants allotted on December 28, 2024. The company had received 25% of the issue price at the time of allotment, and the remaining funds will be called to facilitate the conversion of warrants into fully paid-up equity shares.

Regency Fincorp has reported a robust financial performance for the year ended March 31, 2026, with its profit after tax (PAT) growing 170% year-on-year to INR13.4 crores. The asset under management (AUM) increased by 45% to INR261.2 crores from INR170 crores in the previous financial year, driven by a strategic shift towards secured MSME lending.

Financial Performance

The company’s total income rose 85% year-on-year to INR40.1 crores in FY2026, compared to INR21.7 crores in FY2025. For the quarter ended March 31, 2026, total income stood at INR12 crores, reflecting a 43% increase over the corresponding period in the previous year. Net interest income more than doubled to INR27.6 crores for the full year, while Q4 FY2026 net interest income was INR7.5 crores, up 20% year-on-year.

Operational Highlights

A key highlight of the year was the momentum in the secured lending business. Secured disbursements contributed approximately 57% of total disbursements in FY2026, compared to 23% in FY2025. Consequently, the secured loan book now constitutes around 61% of the total AUM, significantly higher than the 18% recorded in FY2025. The company has rationalized its unsecured lending book, including the discontinuation of Joint Liability Group (JLG) loans, to focus on higher-quality credit.

On asset quality, the net NPA stood at 0.74% in FY2026, compared to 0.31% in FY2025. The net worth increased to INR106 crores as of March 2026, supported by internal accruals and capital infusion. The company maintains a Capital to Risk-weighted Assets Ratio (CRAR) of 57.6%.

Strategic Outlook

Management outlined a strategy to scale the secured MSME book and expand digital lending initiatives. The company plans to launch a digital wallet named RedPay and has received a No Objection Certificate (NOC) from the RBI for a PPI license. Geographically, Regency Fincorp intends to deepen its presence in North India, targeting 50 branches by the end of the next financial year, while selectively entering new markets in the West. The average ticket size for MSME loans ranges between INR35 lakhs and INR45 lakhs, with tenures typically between 48 to 60 months.