Sadbhav Engineering will hold its 37th Annual General Meeting on September 30, 2026, via video conferencing. The meeting aims to approve a preferential equity issue to lenders and promoters as part of its resolution plan.

The Board of Directors finalized the issuance plan on September 1, 2026. Shareholders received the notice and annual report electronically on September 7, 2026.

Preferential Allotment Details

The company will issue shares to lenders through the conversion of non-convertible debenture coupons and to the promoter group via unsecured loans. This forms part of the resolution plan under the Reserve Bank of India framework and the Master Restructuring Agreement dated March 25, 2026.

The total value of shares issued to lenders amounts to ₹135.2 crore. Mr. Shashin Patel, a member of the promoter group, will receive shares worth ₹68 crore upon conversion of existing unsecured loans.

Book Closure and E-Voting Schedule

The register of members and share transfer books will remain closed from Thursday, September 24, 2026, to Wednesday, September 30, 2026. The cut-off date for voting rights is Wednesday, September 23, 2026.

Remote e-voting through Central Depository Services (India) Limited commences from Sunday, September 27, 2026, at 9:00 am and ends on Tuesday, September 29, 2026, at 5:00 pm. Members who have not cast their votes remotely can vote during the AGM via the VC/OAVM facility.

Board Appointments and Capital Increase

Shareholders will vote on the appointment of Mr. Ankit Kishorbhai Shah and Mr. Jaldeep Prakashbhai Patel as Non-Executive Independent Directors for five-year terms commencing August 13, 2026. Additionally, the AGM will consider the reappointment of Mr. Siddharth Vyas, who retires by rotation.

The company also seeks approval to increase its authorized share capital from ₹50 crore to ₹100 crore. This involves altering the capital clause of the Memorandum of Association.

Regulatory Approvals and Trading Window

The issuances are subject to statutory and regulatory approvals, including shareholder approval. The company must comply with Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

The trading window for dealing in the company’s securities remains closed from August 27, 2026. It will reopen after the expiry of 48 hours from the conclusion of the board meeting, in compliance with Regulation 29 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.

Sadbhav Engineering allotted non-convertible debentures (NCDs) aggregating ₹167.86 crore to State Bank of India and ICICI Bank Limited on August 25, 2026. The allotment was approved by the Finance and Investment Committee in furtherance of the lenders' accession to the company's Master Restructuring Agreement (MRA).

The issuance consists of two tranches of unlisted, secured, taxable, redeemable NCDs issued at par on a private placement basis. The debentures are held in dematerialized form.

Allotment Details

The total exposure of ₹194.93 crore covered under the accession includes a fund-based exposure of ₹167.86 crore converted into these NCDs and non-fund based limits of ₹27.07 crore. The allotment splits as follows:

Interest is payable along with the repayment of principal amounts on the respective redemption dates. A portion equivalent to 8.99% per annum for NCD-II shall be converted into equity shares subject to regulatory guidelines.

Repayment Schedule

The principal repayment schedules differ between the two tranches:

NCD-I Repayment:

• March 31, 2026: 10.20%
• September 30, 2026: 45.00%
• March 31, 2027: 0.50%
• March 31, 2028: 12.75%
• March 31, 2029: 12.75%
• March 31, 2030: 12.75%
• March 31, 2031: 6.05%

NCD-II Repayment:

• March 2026: 10.20%
• September 2026: 0.50%
• March 2027: 0.50%
• March 2028: 5.00%
• March 2029: 5.00%
• March 2030: 5.00%
• March 2031: 11.50%
• March 2032: 20.50%
• March 2033: 20.50%
• March 2034: 21.30%

Security and Governance

The debentures are secured by hypothecation of current and other movable assets (excluding assets exclusively charged to existing lenders) and mortgage of identified fixed assets. Redemption will be out of the company's cashflows. Penal charges apply in case of default.

The MRA, originally signed in March 2026, aligns with Reserve Bank of India guidelines for stressed assets. Key governance terms include:

• Lenders have the right to appoint nominee directors to the board.
• Promoter debt, both existing and additional infusions, must be converted into equity.

What the Numbers Show

The restructuring shifts significant capital structure weight from cash obligations to debt instruments. With ₹167.86 crore of the ₹194.93 crore total exposure classified as fund-based, over 86% of the restructured debt represents actual cash outflows now converted into NCDs. The dual-tranche structure introduces divergent cost-of-capital implications: NCD-I carries a standard 9% interest rate, while NCD-II offers a nominal 0.01% coupon but mandates an 8.99% annual equity conversion. This mechanism reduces immediate cash interest burdens for the longer tenor while accelerating equity dilution for lenders, aligning their returns with the company's recovery trajectory rather than fixed income.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE226H01026/a111da85-1187-4d3e-9eb3-9fae50ec4d57.pdf