Salem Erode Investments Limited (SEIL) has announced a significant move in its financial strategy, approving the issuance of unlisted secured redeemable non-convertible debentures (NCDs) worth Rs 75 lakhs through private placement. This decision, made by the company's Board of Directors, marks a notable development in SEIL's capital raising efforts.

Debenture Details

The company plans to issue 7,500 NCDs, each with a face value of Rs 1,000. These debentures will be offered in one or more tranches, providing flexibility in the issuance process. SEIL is offering investors two tenure options:

1. 36-month scheme
2. 68-month scheme

For the 36-month monthly scheme, SEIL has set a coupon rate of 12.00% per annum, payable on the first day of every month. This option caters to investors seeking regular income streams.

Additionally, the company is offering cumulative schemes for both 36 months and 68 months, with payment at maturity. The 68-month scheme is notably marketed as a 'doubling' scheme, suggesting potential attractive returns for long-term investors.

Security and Trustee

To ensure investor confidence, the debentures are fully secured against the company's current assets, loans, and advances. This includes standard gold loan receivables and other unencumbered assets, maintaining a minimum security cover of 100% of the outstanding balance of debentures and accrued interest.

Vistra ITCL (India) Limited has been appointed as the debenture trustee, adding an extra layer of security and oversight for investors.

Allotment and Put Option

SEIL has committed to completing the allotment within 30 days from the receipt of application money, ensuring a swift process for interested investors.

The company is offering a put option for the 36-month scheme. This feature allows debenture holders to exercise the option as per the terms and conditions outlined in the Private Placement Offer cum Application Letter. However, exercising the put option will result in a reduced interest rate.

Regulatory Compliance

The company has made the necessary disclosures as required under the master circular issued by the Securities and Exchange Board of India (SEBI) on November 11, 2024. This ensures transparency and compliance with regulatory standards.

Conclusion

This move by Salem Erode Investments Limited to raise Rs 75 lakhs through secured NCDs demonstrates the company's strategic approach to capital raising. By offering varied tenure options and attractive interest rates, SEIL aims to appeal to different investor preferences while securing funds for its operations and growth initiatives. As the private placement process unfolds, it will be interesting to see the market response to this offering.

Salem Erode Investments Limited, a financing company, has reported its financial results for the first quarter, showing a reduction in losses and an increase in revenue compared to the same period last year.

Financial Performance

The company's unaudited standalone financial results for the quarter ended June 30 reveal the following key figures:

Salem Erode Investments Limited reported a net loss of Rs 98.98 lacs for the quarter, compared to a loss of Rs 130.34 lacs in the same quarter last year, representing a 24.1% reduction in losses.

Revenue Growth

The company's total income increased to Rs 110.19 lacs from Rs 96.54 lacs year-over-year, marking a 14.1% growth. Revenue from operations rose to Rs 108.88 lacs from Rs 94.97 lacs, showing a 14.6% increase.

Expense Management

Total expenses decreased to Rs 209.16 lacs from Rs 229.91 lacs in the previous year quarter, indicating improved cost management by the company.

Asset Cover and Compliance

The company maintained full asset cover for its secured debentures through hypothecation of loan receivables and other assets. This includes all loan receivables, advances, Property, Plant and equipment, and other unencumbered assets of the Company on its Secured Unlisted Redeemable Non-Convertible Debentures as of June 30.

Board Meeting and Audit Review

The Board of Directors meeting was held on August 13, where they considered and approved the unaudited standalone financial results. The Audit Committee reviewed the results, and the statutory auditors conducted a limited review, issuing their report accordingly.

Additional Notes

• The company operates within a single primary segment, namely financing.
• Salem Erode Investments Limited has not transferred or acquired any loans, either stressed or not in default, during the quarter.
• The financial results will be published in one English National Daily and one Vernacular newspaper as required under SEBI regulations.

The reduction in net loss and increase in revenue indicate positive momentum for Salem Erode Investments Limited. However, the company continues to face challenges as expenses remain higher than income, resulting in an overall loss for the quarter.