Sadbhav Engineering has scheduled a board meeting for Tuesday, September 1, 2026, to consider the issuance of equity shares on a preferential basis. The company notified stock exchanges of the agenda, which includes restructuring-related conversions.

The meeting aims to address specific corporate actions under regulatory frameworks. Key items for consideration include the conversion of non-convertible debenture coupons into equity for lenders. This action aligns with the resolution plan under the Reserve Bank of India framework and the Master Restructuring Agreement dated March 25, 2026, along with its subsequent accession on August 25, 2026.

Agenda Details

The board will also consider issuing equity shares and warrants to members of the promoter group. This issuance is proposed on a preferential basis through the conversion of existing unsecured loans. Additionally, the directors will review the 37th Notice for the ensuing Annual General Meeting.

Trading Window Closure

The trading window for dealing in the company’s securities is closed from Thursday, August 27, 2026. It will remain shut until the expiry of 48 hours after the submission of the outcome of the board meeting. This closure complies with Regulation 29 of the SEBI (Listing Obligation and Disclosures 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