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

Catalyst Trusteeship Limited has disclosed an encumbrance over 1,83,50,000 equity shares of Sadbhav Engineering , representing 10.70% of the company's total voting capital. The disclosure, submitted to BSE Limited and the National Stock Exchange of India Limited on July 21, 2026, confirms that the trustee continues to hold these shares as an agent for debenture holders following a debt restructuring exercise.

The shares in question were originally pledged in favour of the debenture trustee for non-convertible debentures issued by Sadbhav Infrastructure Project Limited. The pledge was invoked on September 10, 2025, with an initial disclosure made to the exchanges on September 11, 2025. Under the terms of the restructuring, Catalyst Trusteeship Limited will hold and deal in the invoked shares for the benefit of holders of the SHAPL Debentures issued by Sadbhav Hybrid Annuity Projects Limited.

Shareholding Details

The filing provides a detailed breakdown of the acquirer's holding before and after the encumbrance. The total equity share capital of Sadbhav Engineering Limited stands at 17,15,70,800 shares, while the total diluted share capital is 18,15,70,800 shares.

Regulatory Context

The disclosure was made pursuant to Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Catalyst Trusteeship Limited clarified that it does not belong to the promoter or promoter group of the target company. The intimation regarding the encumbrance was received on July 17, 2026. The ISIN for the invoked shares is INE226H01026.