Hyderabad, 19 February 2025: Prachay Capital Limited, an RBI-registered Non-Banking Financial Company – Investment and Credit Company (NBFC-ICC), has announced the public issue of its Secured, Rated, Redeemable Non-Convertible Debentures (NCDs) to raise to ₹100 Crore. The issue opens on 28 February 2025 and closes on 13 March 2025.

The BBB-/Stable CRISIL-rated NCDs offer investors a 13% p.a. return with monthly interest payments, making it a fixed-income investment opportunity. The proceeds from this issue of NCDs will be primarily used for the stated fund utilization.

Speaking about the issue, Mr Girish Murlidhar Lakhotiya, Managing Director, Prachay Capital Limited said: “This NCD issue is a key step in Prachay Capital’s expansion strategy. With our focus on structured corporate lending and investment in private debt instruments, we aim to generate strong and sustainable returns for our investors while maintaining a robust financial profile.

Prachay Capital has zero delays in servicing liabilities and has a Gross NPA of 0% on its Assets Under Management (AUM). The Company’s AUM has grown at a CAGR of 46.61% from ₹ 132.92 Crore as of March 31, 2022, to ₹ 285.70 Crore, as of March 31, 2024, and has a return on equity (ROE) above 17% post-tax over the last three financial years. The Company’s Net Interest Margin (NIM) for the last three financial years ending on March 31, 2024, March 31, 2023, and March 31, 2022, stood at 8.40%, 9,49%, and 11.02%, respectively and the Company’s Return on Total Assets (ROTA) have been in the range of 4% to 5% for the same period. As of the quarter and six-month period ended September 30, 2024, the Company’s Capital Risk Adequacy Ratio (CRAR) was 27.32%.

With BSE listing, the issue is open for subscription by retail individual investors, high-net-worth individual investors (HNIs), institutional investors, and corporates. For details relating to eligible investors, see “Issue Structure” beginning on page 189 of the Prospectus.

In the first half of fiscal 2025, 607 different issuers tapped the corporate bond market, issuing bonds totaling Rs 5.11 lakh crore. In fiscal 2025, the corporate bond market saw 200+ new issuers, reflecting growing confidence and participation in the debt market. Moreover, AAA-rated corporate bonds dominated the bond market with ~67% issuances in the first half of fiscal 2025.” He added

Issue Structure & Payment Terms

•  Coupon Rate – 13% p.a.
•  Payment Frequency: Monthly – As per “Issue Structure – Specific Terms of NCDs” (Page 189 of the Prospectus).
•  Interest Calculation: Based on actual day count convention.
•  Call Option: The company has the right (but no obligation) to redeem outstanding NCDs (fully or partially), at any time after 1 () year from the Deemed Date of Allotment of NCDs, with a notice of at least 21 days before exercising such call option.
•  Record Date: 15 days before the interest or redemption payment date.
•  Application Money: Full amount payable at the time of application.
•  Governing Law & Jurisdiction: The issue is governed by Indian law, and legal matters fall under the exclusive jurisdiction of Pune, Maharashtra.

We cater to the finance needs of medium and large businesses through corporate credit and corporate bonds.. Our lending is secured by movable/immovable assets and cash flows.

The company operates across two key financial segments:

•  Corporate Credit (83.40% of AUM as of September 30, 2024): The focus is on identifying the specific financial needs and the business objective to be achieved by the borrowings and structuring a financial arrangement such that the infusion of debt funds would result in achieving the business objective of our clients and will result in cashflows which will ultimately be the source of repayment for the borrowing.
•  Corporate Bonds – Unlisted, Privately Placed NCDs (16.60% of AUM as of September 30, 2024): Lending to corporates in the form of non-convertible debentures instead of traditional loans. The compliance process of unlisted, privately placed NCDs is relatively simpler and provides significant flexibility to businesses to raise funds in the manner that best suits their business models.

We have a long-term and sustainable business model which offers unambiguous value propositions to all our stakeholders. For our debt investors, we offer fixed and periodic returns which are higher than traditional debt investment opportunities such as fixed deposits, liquid mutual funds, etc. For our borrowers, we provide fast and flexible financial solutions to medium to large-sized localized businesses. For our employees, we provide the opportunity to work in the field of business finance and create innovative, mutually beneficial financial solutions and structures in an organization that supports the holistic growth of an individual.