Poonawalla Fincorp Limited , a prominent player in the financial services sector, has successfully raised ₹500 crore through a private placement of secured, rated, non-convertible debentures (NCDs). This strategic move is expected to bolster the company's financial position and support its growth initiatives.

Key Details of the NCD Issuance

The Finance Committee of Poonawalla Fincorp, as authorized by the Board of Directors, approved the issuance of these NCDs. The debentures have been structured with the following characteristics:

• Issue Size: Base issue of ₹150 crore with a green shoe option to retain oversubscription up to ₹350 crore, totaling ₹500 crore
• Face Value: ₹1,00,000 per NCD
• Listing: Proposed to be listed on BSE Limited
• Series: PFL Series 'E1'
• Security: First ranking pari passu charge on the Hypothecated Properties

Purpose and Implications

While the specific use of proceeds was not disclosed, such fundraising efforts typically aim to:

1. Strengthen the company's capital base
2. Support lending activities
3. Refinance existing debt
4. Fund expansion plans

The successful placement of these NCDs demonstrates investor confidence in Poonawalla Fincorp's business model and growth prospects. It also reflects the company's ability to access diverse funding sources in the current market environment.

Market Position

Poonawalla Fincorp, formerly known as Magma Fincorp, has been focusing on retail and small business lending since its acquisition by the Poonawalla Group. This fundraise is likely to support the company's strategy of expanding its loan book and market presence in the financial services sector.

Investor Perspective

For investors, the issuance of secured NCDs by a reputable financial institution like Poonawalla Fincorp presents an opportunity for stable returns. The security feature and the company's strong parentage add layers of comfort for debt investors.

As the financial services landscape continues to evolve, Poonawalla Fincorp's latest fundraising initiative positions it well to capitalize on growth opportunities and navigate market challenges.

Note: Investors are advised to review the detailed terms and conditions of the NCD issuance and consult financial advisors before making investment decisions.

Poonawalla Fincorp Limited , a prominent player in the financial services sector, has announced its decision to exercise the call option on its unsecured non-convertible perpetual bonds. This move, detailed in a recent corporate filing, outlines the company's strategy for managing its debt instruments.

Bond Redemption Details

Poonawalla Fincorp will redeem 40 unsecured non-convertible perpetual bonds, each valued at Rs 5 lakh, for a total of Rs 2 crore. These bonds, which were issued on September 18, 2015, carry a 12.10% interest rate. The company has set the redemption date for September 18, 2025, with September 3, 2025, established as the record date for determining eligible bondholders.

Key Points of the Redemption

Call Option and Interest Rate

The company's decision to exercise the call option comes at the 10-year mark from the bond's issuance date, which is the minimum period required before the option could be exercised. Had Poonawalla Fincorp chosen not to exercise this option, the interest rate would have increased by 100 basis points to 13.10% annually for subsequent years.

Payment Process

Poonawalla Fincorp has confirmed that the redemption amount, which includes the face value of the bonds along with accrued interest, will be paid to bondholders by crediting their bank accounts linked to their respective demat accounts. Following the payment, the bonds will be fully extinguished.

Regulatory Compliance

In compliance with regulatory requirements, Poonawalla Fincorp has notified Catalyst Trusteeship Limited, the debenture trustee, and the bondholders about its intent to exercise the call option. The company has also informed the stock exchanges as per the Securities and Exchange Board of India (SEBI) regulations.

Impact on Bondholders

Bondholders are advised to ensure their bank account details linked to their demat accounts are up to date to facilitate smooth processing of the redemption amount. The company has emphasized that no claims will be entertained after the redemption of these bonds.

This strategic move by Poonawalla Fincorp to redeem these perpetual bonds demonstrates the company's proactive approach to managing its debt instruments and optimizing its financial structure.