Prachay Capital Limited, a Pune-based NBFC, is coming up with its secured Non-Convertible Debenture (NCD) issue in February 2025. The company primarily offers structured financial solutions to real estate developers and has a growing presence in the lending business. This article provides complete details about Prachay Capital NCD February 2025, including issue details, interest rates, credit ratings, risks, and whether investors should consider investing.
About Prachay Capital Limited
Prachay Capital Limited is a RBI registered non-deposit taking Non-Banking Financial Company and registered in Feb-2017.
Company primarily delivers structured financial solutions to real estate developers, particularly within the mid to large business segment. Company operations are concentrated in Pune, Maharashtra, with plans for expansion into other cities such as Hyderabad and Bhubaneswar. The company is a subsidiary of the Prachay Group, which also encompasses a boutique investment banking firm known as Prachay Advisors.
Prachay Capital NCD February 2025 – Issue Details
- Issue Open: February 28, 2025 – March 13, 2025
- Security Name: Prachay Capital Limited
- Security Type: Secured, Redeemable, Non-Convertible Debentures (Secured NCDs)
- Issue Size (Base): ₹ 50.00 Crores
- Issue Size (Oversubscription): ₹ 50.00 Crores
- Overall Issue Size: ₹ 100.00 Crores
- Issue Price: ₹ 1,000 per NCD
- Face Value: ₹ 1,000 each NCD
- Minimum Lot Size: 10 NCDs
- Market Lot: 1 NCD
- Listing: BSE
- Credit Rating: BBB-/Stable by CRISIL Ratings Limited
- Tenor: 5 Years
- Payment Frequency: Monthly
- Basis of Allotment: First Come, First Serve Basis
- Debenture Trustee: Catalyst Trusteeship Limited
NCD Allocation Ratio
- Institutional Investors: 10%
- Non-Institutional Investors: 20%
- HNI Investors: 40%
- Retail Investors: 30%
Interest Rates on Prachay Capital NCD February 2025
| Series | Frequency of Interest Payment | Nature | Tenor | Coupon Rate (% per Annum) | Effective Yield (% per Annum) | Amount on Maturity (₹.) |
|---|---|---|---|---|---|---|
| 1 | Monthly | Secured | 5 Years | 13% | 13.79% | ₹ 1,000 |
Credit Rating
The NCDs issued by Prachay Capital Limited are rated BBB-/Stable by CRISIL Ratings Limited. This indicates a moderate degree of safety regarding timely servicing of financial obligations, but they also carry moderate credit risk.
Company Financials
| Particulars | 31 Mar 2024 (₹ Crores) | 31 Mar 2023 (₹ Crores) |
|---|---|---|
| Total Assets | 313.2 | 233.93 |
| Revenue | 42.05 | 36.52 |
| Profit After Tax | 1,102.3 | 10.32 |
Objects of the Issue
The funds raised through this NCD issue will be utilized for the following purposes:
- Onward Lending – The company plans to use the proceeds to provide further loans.
- Investment in AIF Schemes – Funds will be used for investment in privately placed corporate bonds through AIFs managed by its subsidiary, Prachay Investment Managers Pvt. Ltd.
- Debt Repayment – A portion of the funds will be used to repay or pre-pay existing borrowings.
- General Corporate Purposes – To meet routine operational and business expansion needs.
Reasons to Invest in Prachay Capital NCD February 2025
- Attractive Interest Rate: The NCDs offer 13% annual coupon rate, which is significantly higher than fixed deposits and many debt instruments.
- Secured NCDs: Since these are secured debentures, they have a charge over company assets, providing some degree of security.
- Monthly Interest Payout: Investors looking for regular income can benefit from monthly interest payments.
- Growing Business Presence: Prachay Capital is expanding its financial services across multiple cities, which can help future growth.
Risks Involved in Prachay Capital NCDs
- Moderate Credit Rating: The CRISIL rating of BBB-/Stable indicates moderate safety, meaning these NCDs carry some risk of default.
- Concentration in Real Estate Lending: The company primarily lends to real estate developers, which can be risky if the sector faces downturns.
- Liquidity Risk: Unlike stocks, NCDs have limited liquidity in the secondary market, making them difficult to exit before maturity.
- Rising Interest Rates: If RBI hikes interest rates, newer bonds may offer better returns, reducing the attractiveness of these NCDs in the long run.
- Investors should check complete risk factors indicated in Prachay Capital NCD Feb-2025 NCD prospectus
Should You Invest in Prachay Capital NCDs?
Investors seeking high fixed-income returns with a high risk appetite can consider these NCDs, especially for the monthly income feature.
However, the low credit rating and real estate exposure add risks. Moderate to conservative investors should consider safer options like bank FDs, gilt funds, or AAA-rated NCDs before investing.
Would you invest in this NCD issue? Share your thoughts in the comments below! !
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