TruCap Finance Limited has announced the termination of significant agreements with Marwadi Chandarana Intermediaries Brokers Private Limited, marking a notable shift in the company's anticipated ownership structure and capital infusion plans.

Agreement Termination Details

The terminated agreements, originally executed on May 26, included:

1. A share purchase agreement (SPA) for the acquisition of 3,68,00,220 equity shares from the company's promoters and promoter group.
2. A securities subscription agreement (SSA) for 11,56,80,000 equity shares and 9,37,00,000 convertible warrants.

Marwadi Chandarana Intermediaries Brokers Private Limited, acting as the acquirer, communicated the termination through a letter dated September 22, which was received by TruCap Finance on September 23.

Impact on Ownership and Control

As a result of this termination, Marwadi Chandarana will no longer be able to gain control over TruCap Finance as initially planned. The acquisition would have led to their classification as part of the promoter and promoter group, significantly altering the company's ownership structure.

Financial Implications

TruCap Finance has stated that the termination does not have a material impact on the company's operations. However, it noted that the expected fund infusion from the equity shares and convertible warrants subscription will no longer occur. This development may affect the company's previously anticipated capital plans.

Parties Involved

The terminated agreements involved several parties:

• Marwadi Chandarana Intermediaries Brokers Private Limited (Acquirer)
• Mrs. Minaxi Kishore Mehta, Mr. Kishore Gangadas Mehta, Wilson Holdings Private Limited, Wilson Growth Private Limited, and Anjaneya Realty Management LLP (Sellers)
• Prolific Ventures Private Limited, Ms. Rushina Mehta, and NM Family Investment Trust (Specified Parties)
• TruCap Finance Limited (Company)

Regulatory Compliance

TruCap Finance has made this disclosure in compliance with Regulations 30 and 51 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. The company's prompt communication of this development underscores its commitment to transparency and adherence to regulatory requirements.

As the financial landscape continues to evolve, stakeholders and investors will be keen to observe TruCap Finance's next steps in light of this significant change in its strategic direction.

TruCap Finance Limited , a non-banking financial company (NBFC), has encountered a significant setback as major credit rating agencies downgraded its ratings to default levels, following the company's failure to meet its debt obligations.

Multiple Rating Downgrades

CARE Ratings has downgraded TruCap's long-term bank facilities of ₹750.00 crore and non-convertible debentures worth ₹150.00 crore to 'CARE D' from 'CARE BB+'. Simultaneously, Infomerics Valuation and Rating Private Limited lowered the ratings on bank facilities totaling ₹185.00 crore to 'IVR C' from 'IVR BBB'.

Default on Debt Payments

The downgrades were triggered by TruCap's inability to service interest and principal payments amounting to ₹72.28 crore on its non-convertible debentures, which were due on July 16. This default has raised serious concerns about the company's financial health and liquidity position.

Factors Contributing to the Crisis

TruCap's financial woes stem from multiple factors:

1. Non-receipt of committed funds from the new promoter entity, Marwadi Chandarana Intermediaries Brokers Private Limited.
2. Premature redemption demands from debenture holders.
3. Severe liquidity pressure, exacerbated by these unexpected developments.

Uncertain Acquisition Plans

The ratings remain on watch with developing implications, reflecting the uncertainty surrounding the proposed acquisition by the Marwadi Group. This acquisition, if completed, could potentially infuse much-needed capital into TruCap.

Deteriorating Financial Performance

TruCap's financial performance has shown a marked decline:

The company's shift from profit to significant loss and the sharp increase in gross non-performing assets (NPAs) indicate a deteriorating asset quality and profitability.

Liquidity Concerns

As of May 31, TruCap's liquidity profile was severely strained. The company faced debt repayments of ₹103.00 crore over the following three months, against unencumbered cash and cash equivalents of only ₹57.00 crore.

Outlook

The default on debt obligations and subsequent rating downgrades have put TruCap Finance in a precarious position. The company's ability to overcome this crisis will depend on its success in securing fresh funding, potentially through the completion of the Marwadi Group acquisition, and its capacity to manage its deteriorating asset quality.

Investors and stakeholders will be closely watching TruCap's next moves as it navigates through this challenging period, with the company's future hanging in the balance.