L&T Finance Limited, a prominent player in the Indian financial services sector, has successfully raised Rs 250 crore through the issuance of non-convertible debentures (NCDs). The company allotted 25,000 senior, secured, rated, listed, redeemable NCDs, each with a face value of Rs 1,00,000.

Key Details of the NCD Issuance

• Issue Size: Rs 250.00 crore
• Number of NCDs: 25,000
• Face Value: Rs 1,00,000 per NCD
• Coupon Rate: 7.1242% per annum
• Tenor: 1,154 days
• Allotment Date: July 29, 2025
• Maturity Date: September 25, 2028
• Interest Payment: Annual

Security and Listing

The debentures are secured by an exclusive first-ranking charge over identified fixed deposits and standard receivables of L&T Finance. This security structure provides additional comfort to investors. The company plans to list these NCDs on the National Stock Exchange of India Limited under the New Debt Market segment.

Coupon Payment Schedule

The first coupon payment is scheduled for September 25, 2025, followed by annual payments thereafter. The detailed payment schedule is as follows:

Default Provisions

In case of a payment default extending beyond three months, L&T Finance will be liable to pay an additional interest of 2% per annum over the coupon rate for the defaulting period. This provision aims to protect investor interests and ensure timely payments.

Implications for L&T Finance

This successful NCD issuance demonstrates L&T Finance's strong standing in the debt market and its ability to raise funds at competitive rates. The funds raised through this issue are likely to be used for the company's general corporate purposes, including lending activities and repayment of existing debts.

The relatively long tenor of the NCDs (over 3 years) suggests that L&T Finance is focusing on long-term funding sources to match its asset profile, which is a prudent asset-liability management strategy.

This debt raise comes at a time when the Indian financial services sector is witnessing robust growth, particularly in retail lending segments. L&T Finance, with its diversified product portfolio spanning rural, housing, and infrastructure finance, is well-positioned to capitalize on these growth opportunities.

As the financial landscape continues to evolve, L&T Finance's ability to access diverse funding sources, including through instruments like NCDs, will be crucial in maintaining its growth trajectory and competitive edge in the market.

L&T Finance , a leading non-banking financial company, has reported a robust performance for the quarter, showcasing strong growth across key financial metrics and business segments.

Financial Highlights

• Profit After Tax (PAT) reached Rs 701.00 crore, marking a 10% increase quarter-on-quarter and a 2% rise year-on-year.
• The consolidated book achieved a record high of Rs 1,02,314.00 crore.
• Return on Assets (RoA) improved to 2.37%, up by 15 basis points quarter-on-quarter.

Retail Business Performance

• Retail disbursements grew by 18% year-on-year to Rs 17,522.00 crore, driven by strong performance across business segments.
• The retail book stood at Rs 99,816.00 crore, reflecting an 18% year-on-year growth.

Key Business Developments

• L&T Finance completed the acquisition and integration of Paul Merchants Finance's gold loan business, adding 130 branches and a Rs 1,300.00 crore book.
• Rural Business Finance showed positive momentum with a 10% quarter-on-quarter growth in disbursements, though Karnataka collections require additional time to normalize.
• The company utilized Rs 300.00 crore of macro-prudential provisions due to flow-forwards from the previous quarter.

Technology and Innovation

• Project Cyclops, the company's AI-ML credit underwriting engine, showed encouraging results in Two Wheeler Finance, reducing net non-starters to 0.34% from 2.36% over five months.
• Personal loans disbursements grew 65% year-on-year, supported by digital partnerships with Amazon Pay, Cred, and PhonePe.

International Credit Ratings

L&T Finance received its first international credit ratings:

• S&P Global: BBB-/A-3 with a positive outlook
• Fitch: BBB- with a stable outlook

Management Outlook

• The management expects credit costs to stabilize at 2.30%-2.50% by year-end.
• Anticipates improved performance in the second half of the financial year.

L&T Finance's strong performance this quarter, coupled with strategic acquisitions and technological advancements, positions the company well for continued growth in the coming quarters. The management's focus on risk-calibrated growth and digital initiatives is expected to drive further improvements in the company's financial metrics.