KLM Axiva NCD XIII issue review - (Not Rated)

•    This is the 13th debt offer from the company since September 2018.
•    The last debt offer was in the month of July 2025.
•    It has posted pressure on its net margins as indicated by its Q1-FY26 performance.
•    It has maintained coupon rates with sustained rating of ACUITE BBB/Stable.
•    There is no harm in skipping this poorly rated debt offer that carry moderate risk.

ABOUT COMPANY:
KLM Axiva Finvest Ltd. (KLMAFL) (erstwhile known as Needs Finvest Ltd.) is a non-deposit taking systemically important non-banking finance company ("NBFC") primarily serving low and middle-income individuals and businesses that have limited or no access to formal banking and finance channels.

It provides training to employees both as a commitment to their career development and also to ensure quality service to customers. These trainings are conducted on joining as part of employee initiation and include additional on-the-job trainings. 

As on September 30, 2025, KLMAFL operates through 649 branches across six states namely Kerala, Karnataka, Tamil Nadu, Telangana, Andhra Pradesh and Maharashtra managed through its corporate office located at Kochi. As of the said date, it had 2312 employees on its payroll and additional temporary employees on a commission basis. 

ISSUE DETAILS:
The company is coming out with its 13th debt offer since September 2018. The company will be issuing 1000000 secured redeemable non-convertible debentures of Rs. 1000 each. The base size of the issue is Rs. 50 cr. and it has an option to retain oversubscription to the tune of Rs. 50 cr. thus making a total issue size of Rs. 100cr. The issue opens for subscription on December 01, 2025, and will close on or before December 12, 2025. Minimum application is to be made for 5 NCDs (i.e., Rs. 5000.00) and in multiple of 1 NCD (i.e., Rs. 1000.00) thereon, thereafter. Post allotment, these NCDs will be listed on BSE only. 

The company will be spending Rs. 1.06 cr. for this entire issue process. From the net proceeds, the company will use at least 75% for onward lending, financing, and repayment/prepayment of principal and interest on existing borrowings and a maximum of up to 25% for general corporate purposes. 

Vivro Financial Services Pvt. Ltd., is the sole lead manager for this issue and Vistra ITCL (India) Ltd. is the debenture trustee. KFin Technologies Pvt. Ltd. is the registrar to the issue. The company has allocated 10% for Category I, 40% for Category II and 50% for Category III.

The company is offering coupon rates ranging from 9.50% to 11.00%. It has tenure ranging from 400 days, 16 months, 18 months, 2 yrs., 3 yrs., 5 yrs., and 79 months. It offers Monthly, Annually, and Cumulative interest payment mods based on series and tenure. 

CREDIT RATING:
The debt offering is rated ACUITE BBB / Stable by Acuite Ratings and Research Ltd. The rating given by Acuité Ratings is valid as on the date of this Prospectus and shall remain valid on date of the issue and allotment of NCDs and the listing of the NCDs on BSE. The ratings provided by rating agency may be suspended, withdrawn or revised at any time by the assigning rating agency on the basis of new information etc., and should be evaluated accordingly.

The instruments with this rating are considered to have moderate degree of safety regarding timely servicing of financial obligations and carry moderate credit risk. The ratings are not a recommendation or suggestion, directly or indirectly, to buy, sell, make or hold securities and investors should take their own decisions. 

FINANCIAL PERFORMANCE: 
On the financial performance front, for the last three fiscals, KLMAFL has (on a consolidated basis) posted a total income/net profit of Rs. 126.52 cr. / Rs. 7.06 cr. (FY21), Rs. 185.91 cr. / Rs. 11.38 cr. (FY22), Rs. 278.75 cr. / Rs. 18.33 cr. (FY23), Rs. 315.92 cr. / Rs. 23.03 cr. (FY24), Rs. 340.66 cr. / Rs. 20.19 cr. (FY25). For Q1 of FY26 ended on June 30, 2025, it posted net profit of Rs. 1.09 cr. on a total income of Rs. 82.24 cr., against net profit of Rs. 5.68 cr. on a total income of Rs. 83.02 cr. for corresponding previous quarter. The company has been reporting pressure on margins as indicated by Q1-FY26 numbers.

Its current debt-equity ratio of 5.56 as of June 30, 2025, will rise to 5.91 post this debt issue. Its net NPA stood at 1.37% as of June 30, 2025, against 0.93% for March 31, 2025.