Akme Fintrade (India) Limited, a prominent player in the financial services sector, has taken a significant step to bolster its capital base. The company's board of directors has approved and executed a fundraising initiative of ₹50 crore through the issuance of Non-Convertible Debentures (NCDs).

Key Details of the NCD Issuance

The board meeting, held on August 22, at the company's registered office, resulted in the allotment of 50,000 Listed, Rated, Senior, Secured, Transferable, Redeemable NCDs. Each debenture is valued at ₹10,000, culminating in an aggregate amount of ₹50.00 crore. This private placement is designed to attract eligible investors without diluting the company's equity.

NCD Specifications

• Listing: The NCDs are proposed to be listed on the National Stock Exchange (NSE) Limited.
• Tenure: The instruments have a maturity period of up to 24 months, with the allotment date set as August 22 and the maturity date as August 22, two years later.
• Interest Rate: The NCDs offer a coupon rate of 12.00% per annum.
• Payment Schedule: Interest will be payable monthly, with the principal due at maturity.
• Security: The company will maintain a security cover of at least 1.20 times over loan receivables throughout the tenure of the debentures.

Financial Implications

This strategic move allows Akme Fintrade to raise substantial capital without impacting its equity structure. The NCDs provide a fixed-income investment opportunity for eligible investors while offering the company a structured approach to manage its debt and support its growth initiatives.

Additional Board Decisions

In the same meeting, the board also approved the appointment of M/s. Pachori Rupesh & Associates as the company's internal auditor for the upcoming financial year. This appointment aims to strengthen Akme Fintrade's internal control and risk management processes.

Market Impact

The successful placement of NCDs demonstrates investor confidence in Akme Fintrade's financial stability and growth prospects. This capital infusion is expected to enhance the company's lending capabilities and support its expansion plans in the competitive financial services market.

Akme Fintrade (India) Limited has announced robust financial results for the quarter, demonstrating strong growth across key metrics. The non-banking finance company (NBFC) also revealed plans for a non-convertible debenture (NCD) issuance and the appointment of a new secretarial auditor.

Financial Performance Highlights

Akme Fintrade reported a significant 27.41% increase in net profit, reaching ₹9.61 crore compared to ₹7.55 crore in the previous quarter. The company's performance showed improvement across various financial parameters:

The company's Assets Under Management (AUM) grew to ₹675.05 crore, indicating a robust expansion of its loan portfolio. The Return on Equity improved significantly, showcasing enhanced profitability and efficient use of shareholders' capital.

Non-Convertible Debenture Issuance

In a strategic move to bolster its funding base, Akme Fintrade's Board of Directors has approved the issuance of Non-Convertible Debentures (NCDs) up to ₹30 crore. Key details of the NCD issuance include:

• Issuance Type: Private placement
• Coupon Rate: 12% per annum
• Tenure: 24 months from the deemed date of allotment
• Listing: Proposed to be listed on BSE Limited
• Redemption: 50% on the 18th month and 50% on the 24th month

The NCDs will be secured, with a security cover ratio of 1.10 times the outstanding amount, primarily from principal receivables.

Corporate Governance Update

The Board has recommended the appointment of M/s. Ronak Jhuthawat & Co, Practicing Company Secretaries, as the Secretarial Auditors of the company. This appointment, subject to shareholder approval, is for a period of five years.

Management Commentary

Akash Jain, CEO of Akme Fintrade, commented on the results: "We are pleased to report a resilient and strong performance for the quarter, successfully navigating the complex challenges faced by the NBFC sector. Our focused approach on the MSME and vehicle lending segments has been a key strength."

Jain further added, "Looking ahead, we are well-positioned for future growth. Improvement in credit ratings and our efforts to raise funds through various channels at competitive rates has significantly strengthened our balance sheet, giving us the flexibility to continue supporting the backbone of our economy—MSMEs and individuals seeking vehicle ownership."

The company's strategic focus on rural and semi-urban geographies, coupled with its robust risk management practices, appears to be yielding positive results in a challenging economic environment for the NBFC sector.

As Akme Fintrade continues to expand its operations and strengthen its financial position, investors and stakeholders will be keenly watching how the company leverages these positive developments to drive sustainable growth in the coming quarters.