Debt-Led Growth: Arihant Foundations Approves Rs 1 Billion NCD Issuance To Fund Expansion

Arihant Foundations & Housing Ltd has approved the issuance of non-convertible debentures (NCDs) aggregating to Rs 1 billion, marking a strategic move to strengthen its capital base and accelerate project execution across Chennai and other key markets. The decision was ratified by the company’s board during its latest meeting and disclosed in its regulatory filings on September 16, 2025. The NCDs will be issued on a private placement basis to eligible institutional investors, with proceeds earmarked for land acquisition, construction finance, and debt refinancing.

 

This capital infusion is expected to support Arihant’s ongoing residential and commercial developments, including senior living communities, Grade-A office spaces, and redevelopment projects. The issuance aligns with the company’s asset-light joint development model and long-term vision of reshaping urban landscapes through design-first real estate.

 

Key Highlights From The NCD Approval

 

- Board approves issuance of non-convertible debentures worth Rs 1 billion  

- NCDs to be issued via private placement to qualified institutional buyers  

- Tenure, coupon rate, and tranche structure to be finalized in consultation with lead arrangers  

- Funds to be deployed for land acquisition, construction, and debt servicing  

- Move supports expansion of residential, commercial, and senior housing projects  

- Strengthens liquidity position and diversifies funding sources  

 

Strategic Rationale And Capital Allocation

 

The Rs 1 billion NCD issuance is part of Arihant’s broader financial strategy to reduce reliance on short-term bank borrowings and unlock capital for high-yielding projects. The company has identified multiple land parcels in Chennai’s growth corridors and is in advanced stages of negotiation for joint development agreements.

 

Capital raised through the NCDs will be allocated toward:

 

- Acquiring strategic land banks in North and West Chennai  

- Accelerating construction timelines for ongoing residential towers  

- Funding infrastructure upgrades in senior living communities  

- Refinancing existing high-cost loans to improve interest coverage ratio  

- Enhancing working capital for pre-launch marketing and sales  

 

Market Position And Growth Outlook

 

Arihant Foundations has built a reputation for quality and timely delivery over four decades, with a portfolio spanning residential apartments, commercial complexes, and plotted developments. The company’s design-first approach and focus on community-centric planning have helped it maintain a strong brand presence in Tamil Nadu’s competitive real estate market.

 

With Tamil Nadu emerging as one of India’s fastest-growing states, Arihant is strategically positioned to benefit from rising urbanization, infrastructure investments, and demand for organized housing. The company’s recent projects include:

 

- Arihant Villa Viviana, a premium gated community in Mogappair  

- Arihant Industrial Park, catering to MSMEs and logistics firms  

- Arihant Senior Living, offering assisted care and wellness amenities  

 

Investor Sentiment And Financial Performance

 

The NCD issuance is expected to improve Arihant’s debt maturity profile and attract long-term investors seeking stable returns. The company has maintained a conservative leverage ratio and reported a healthy operating margin of 18.4 percent in FY2024–25.

 

Its annual report highlights a turnover of Rs 312 crore and net profit of Rs 28 crore, with a three-year compound annual growth rate of 12 percent. The company’s equity shares are listed on the Bombay Stock Exchange under the scrip code 531381.

 

Outlook And Governance Commitment

 

Arihant’s board, led by CEO Arun Rajan, has reiterated its commitment to transparency, stakeholder value, and sustainable urban development. The NCD issuance reflects the company’s proactive approach to capital management and its readiness to scale operations in response to market demand.

 

As Chennai continues to evolve into a hub for real estate and infrastructure, Arihant’s strategic funding decisions and design-led execution model position it for long-term growth and impact.

 

Sources: BSE India, Arihant Annual Report 2024–25