Prachay Capital Dec. 25 - NCD Issue review - (Not Rated)

•    This is the 2nd debt offer from the company since February 2025.
•    For this offer, it has changed the lead manager.
•    This debt offer is rated BBB -/Stable by CRISIL and offers 12.50% to13% coupon rates based on series selected.
•    The coupon rates are very lucrative, but the rating is poor, hence needs cautious approach.
•    Well-informed investors may park moderate funds for regular interest income.

ABOUT COMPANY:
Prachay Capital Ltd. (PCL) is an RBI registered non-deposit taking Non-Banking Financial Company - Investment and Credit Company falling under the Base Layer category, bearing registration No. N-13.02198 dated August 11, 2017 subsequently, upon the change of name from Pracaya Financial Services Private Limited to Prachay Capital Private Limited, a new certificate of registration was issued on May 7, 2019 in lieu of original certificate. Following the conversion to a Public Limited Company, it received a fresh certificate of registration on October 7, 2024 under Section 45-IA of the RBI Act. PCL caters to the finance needs of medium and large business through corporate credit and corporate bonds.

The company has established an integrated financial ecosystem together with its wholly-owned subsidiaries namely, Prachay Securities Private Limited (“PSPL”) and Prachay Investment Managers Private Limited (“PIMPL”), provides comprehensive credit and investment solutions including private credit, corporate bonds, facilitating issuance and trading of fixed income securities, providing investment solutions to institutional and high net-worth investors and managing debt focused AIF schemes. This structure allows it to originate, structure, invest, and distribute capital market-linked credit products, offering a comprehensive platform for both borrowers and investors.

For Corporate Credit product, the focus is on identifying the special financial needs and the business objective to be achieved by the borrowings and structure a financial arrangement such that the infusion of debt funds would result in achieving business objective of clients and will result in cash flows which will ultimately be the source of repayment for the borrowing. As on six months period ended September 30, 2025, the company had 61 employees.

ISSUE DETAILS:
The company is coming out with its 2nd debt offer of 1500000 listed, rated, secured, redeemable, non-convertible debentures of face value of Rs. 1000 each, to mobilize over all Rs. 150 cr. The issue consists of Rs. 75 cr. for base size and a green shoe option of retaining oversubscription of Rs. 75 cr. The issue opens for subscription on December 11, 2025, and will close on or before December 24, 2025. The minimum application to be made is for 10 NCDs (Rs. 10000) and in multiple of 1 NCD (Rs. 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE. 
This debt offer is solely lead managed by Kreo Capital Pvt. Ltd., and KFin Technologies Ltd. is the registrar to the issue. Catalyst Trusteeship Ltd. is the debenture trustee. For this offer, mandate is given to new lead manager.

This debt offer has tenor of 36 months, 48 months and 60 months and carries a coupon rates ranging between 12.50% to 13% based on the series opted by the investors and has a monthly interest payment mode. The company has allocated 50% for non-Institutional category, 40% for HNIs and 10% for Retail investors.
The company is spending Rs. 5.00 cr. for this debt issue and from the net proceeds, it will utilize at least 75% for the purpose of onward lending, investment in its various schemes, repayment/prepayment of certain borrowings, and maximum up to 25% for general corporate purposes.

ISSUE RATING:
This debt offer is rated CRISIL BBB -/Stable outlook by CRISIL Ltd. Instruments with this rating are considered to have moderate degree of safety regarding timely servicing of financial obligations and such securities carry moderate credit risk. The rating issued by CRISIL is live until withdrawn or changed and as available on CRISIL’s website. 

The rating provided by the Credit Rating Agency may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. These ratings are not a recommendation to buy, sell or hold securities and investors should take their own decisions. In case of any change in credit ratings till the listing of NCDs, the Company will inform the investors through public notices/ advertisements in all those newspapers or electronic modes such as online newspapers or website of the Issuer or the stock exchanges in which pre-issue advertisement has been given.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has (on a consolidated basis) posted a total income/net profit of Rs. 36.74 cr. / Rs. 10.32 cr. (FY23), Rs. 42.54 cr. / Rs. 11.02 cr. (FY24), Rs. 58.15 cr. / Rs. 12.61 cr. (FY25). For H1 of FY26 ended on September 30, 2025, it earned a net profit of Rs. 4.14 cr. on a total income of Rs. 34.66 cr. The company has posted some growth in its top and bottom lines for the reported periods, however, H1-FY26 indicates downturn.
Its debt equity ratio of 2.37 as of September 30, 2025, will stand enhanced to 3.69 post this issue.