Regency Fincorp approves ₹50 crore secured NCD issue for lending growth
- Regency Fincorp approves ₹50 crore secured NCD issue via private placement
- Structure includes ₹30 crore base issue and ₹20 crore green shoe option
- NCDs carry 12.00% coupon rate payable monthly with 15-month tenure
- Funds to expand MSME secured lending and digital lending operations
- Company grew AUM by 45% YoY in FY26 with 10.3% net interest margin
*this image is generated using AI for illustrative purposes only.
Regency Fincorp has approved the issuance of ₹50 crore worth of secured, rated, listed non-convertible debentures (NCDs) on a private placement basis. The Board of Directors finalized the revised structure during its meeting held on September 9, 2026. This update supersedes the earlier reported ₹75 crore proposal.
The company, formerly known as Regency Investments Limited, confirmed the approval in a press release issued on the same date. The funds raised will be deployed to grow two core business areas: MSME Secured Lending and Digital Lending.
Issue Structure
The issuance comprises a base issue of ₹30 crore along with an oversubscription option (green shoe) of ₹20 crore. The NCDs will have a tenure of 15 months from the deemed date of allotment. Each debenture carries a face value of ₹10,000. The interest offered is 12.00% per annum, payable monthly.
| Component | Amount | Details |
|---|---|---|
| Base Issue | ₹30 crore | 30,000 NCDs |
| Green Shoe Option | ₹20 crore | 20,000 NCDs |
| Total Potential Raise | ₹50 crore | Secured, Rated, Listed |
| Tenure | 15 months | From allotment date |
| Coupon Rate | 12.00% | Payable monthly |
Strategic Rationale
The funds raised will support the company’s stable, asset-backed secured lending foundation while fueling its digital lending growth engine. This capital raise aligns with Reserve Bank of India directives urging NBFCs to maintain a diversified funding base while pursuing prudent risk management and asset quality standards.
Financial Context
Managing Director Gaurav Kumar highlighted that the company grew its assets under management (AUM) by 45% year-on-year in FY26. He noted that the net interest margin (NIM) stood at 10.3%. The decision to raise debt through the secured NCD route was driven by credit offtake, aiming to scale both secured and digital lending operations while maintaining disciplined risk approaches.
Additional Board Approvals
During the same meeting, the Board also considered proposals for:
- Appointment of Catalyst Trusteeship Limited as Trustee for the NCD issuance.
- Appointment of Credora Partners Private Limited as Merchant Banker for the issuance.
- Issuance of Employee Stock Options (ESOPs) to eligible employees.
- Raising funds through Equity Shares, Warrants on Preferential Basis, or Compulsory Convertible Debentures (CCDs), subject to regulatory approvals.
Historical Stock Returns for Regency Fincorp
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.14% | +2.22% | -0.89% | +85.45% | +9.68% | +821.41% |
How will the 12% coupon rate on these NCDs impact Regency Fincorp's overall cost of debt and net interest margins compared to its current funding mix?
What specific regulatory hurdles or approval timelines might affect the proposed equity raise via warrants or CCDs mentioned in the board meeting?
Given the shift from a ₹75 crore to a ₹50 crore target, what market conditions or investor feedback likely influenced the reduction in the issuance size?
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