Shirdi Sai Electricals Limited has announced a significant financial move, executing agreements to issue secured debentures worth ₹750 crore. This issuance comprises ₹600 crore in non-convertible debentures (NCDs) and ₹150 crore in optionally convertible debentures (OCDs). In a related development, the company plans to pledge a 26% stake in Indo Tech Transformers Limited as security for these debentures.

Debenture Issuance Details

The company has structured its debenture issuance as follows:

Pledge Details

As part of the security arrangement for these debentures, Shirdi Sai Electricals plans to pledge 27,61,200 equity shares of Indo Tech Transformers Limited, representing a 26% stake in the company. This pledge will serve as common security for both the NCD and OCD issuances.

Key Points of the Arrangement

1. Current Status: The shares earmarked for pledge are currently pledged to existing lenders.
2. Repayment Plan: The existing lenders will be repaid using proceeds from the non-convertible debentures.
3. New Pledge Creation: Once the existing encumbrance is released, a new pledge will be created in favor of Catalyst Trusteeship Limited, which will act as the debenture trustee.
4. Regulatory Compliance: The disclosure of this arrangement was made under SEBI takeover regulations, as shares taken by way of encumbrance are treated as acquisition.

Timeline and Implementation

The encumbrance undertaking, which is essentially an undertaking to create the pledge in the future, was given on November 7, 2025. The actual creation of the pledge is subject to the release of the existing encumbrance and will be executed within the timelines specified in the debenture trust deeds.

Implications

This financial move by Shirdi Sai Electricals indicates a strategic approach to raising capital while utilizing its stake in Indo Tech Transformers as collateral. The issuance of both non-convertible and optionally convertible debentures provides the company with a diverse financing structure, potentially offering flexibility in terms of repayment and conversion options.

The pledge of a significant stake in Indo Tech Transformers underscores the importance of this security arrangement in facilitating the debenture issuance. It also highlights the intricate relationships between corporate entities and the strategic use of shareholdings in fundraising activities.

As this corporate action unfolds, stakeholders will be keenly watching how Shirdi Sai Electricals utilizes the raised funds and manages its obligations, both in terms of debenture servicing and maintaining its strategic interest in Indo Tech Transformers.

Catalyst Trusteeship Limited has issued a clarification regarding the proposed pledge on 26% of equity shares of Indo Tech Transformers Limited (ITTL). This clarification comes in response to a disclosure made under Regulation 29(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Key Details of the Arrangement

• Debenture Trust Deed (DTD): Executed on October 30, 2025, between Catalyst Trusteeship and Shirdi Sai Electricals Limited (SSEL)
• Purpose: Issuance of Non-Convertible Debentures (NCDs) worth up to INR 600.00 crores
• Proposed Pledge: 27,61,200 equity shares (26% of ITTL's share capital)
• Security Structure: Pledge to serve as common security for both NCDs and proposed Optionally Convertible Debentures (OCDs)

Current Status and Future Actions

Catalyst Trusteeship has emphasized that the pledge has not been created as of the clarification date. The shares proposed for pledging are currently encumbered with existing lenders of SSEL. The new pledge may be created in tranches only after:

1. Repayment to existing lenders
2. Release of current encumbrances
3. Compliance with DTD provisions and related financing documents

Shareholding Details

Implications

This clarification is significant for investors and stakeholders of Indo Tech Transformers Limited. It provides transparency on the proposed financial arrangement and its potential impact on the company's shareholding structure. Investors should note that:

1. The pledge creation is subject to certain conditions and may occur in phases.
2. The arrangement involves both NCDs and potential OCDs, indicating a complex financial structure.
3. The total share capital remains unchanged at 1,06,20,000 equity shares of INR 10.00 each.