Finkurve Financial Services Ltd is preparing to take a significant step in its capital-raising strategy, with its board set to consider the issuance of Non-Convertible Debentures (NCDs) through private placement. The move reflects the company’s intent to strengthen its financial base and support its expanding lending operations, particularly in the gold-backed loan segment.
Here’s a detailed breakdown of the announcement and its broader implications:
Board Meeting and Proposal Details
The board of directors is scheduled to meet on 23 January 2025 to evaluate and approve the proposed issuance of NCDs.
1. The proposed issue size is Rs 17.7 crore, structured as secured, rated, listed, and redeemable debentures
2. The NCDs will carry a 12 percent annual interest rate, with quarterly payments scheduled for March, June, September, and December
3. Tenure of the debentures will be 36 months from the deemed date of allotment, offering medium-term funding stability
Key Highlights From the Proposal
- Strategic funding: The capital raised will be used to support lending operations, expand product offerings, and strengthen liquidity buffers
- Investor access: Listing on the Bombay Stock Exchange will enhance transparency and allow secondary market trading for investors
- Security structure: The debentures will be secured against company receivables, reducing credit risk and improving investor confidence
Company Profile and Business Focus
Finkurve Financial Services Ltd is a registered Non-Banking Financial Company (NBFC) with a focus on retail lending, particularly gold-backed loans and personal finance products.
1. The company has built a strong asset base through conservative underwriting and collateral-backed lending
2. Its gold loan portfolio has shown consistent growth, supported by rising demand and favorable interest spreads
3. Finkurve is also exploring digital lending platforms to expand its reach and improve customer experience
Implications for Stakeholders
The proposed NCD issuance carries several implications for stakeholders:
- Investors: The 12 percent coupon rate offers attractive returns, especially in a low-yield environment, while listing ensures liquidity
- Customers: Strengthened capital base will enable faster loan disbursements and broader product availability
- Regulators: The move aligns with SEBI’s guidelines for transparent and compliant fund-raising through listed instruments
- Employees: Expansion of lending operations may lead to increased hiring and internal growth opportunities
Market Context and Competitive Landscape
The NBFC sector has witnessed renewed investor interest following regulatory reforms and improved asset quality metrics.
1. Demand for secured lending products like gold loans remains robust, especially in Tier-II and Tier-III cities
2. Competitors are increasingly turning to debt markets for funding, making NCDs a preferred instrument for capital raising
3. Finkurve’s conservative risk profile and focus on collateral-backed lending give it a competitive edge in managing credit cycles
Outlook and Future Strategy
Looking ahead, Finkurve Financial Services is expected to focus on:
- Expanding its gold loan footprint through new branches and digital onboarding
- Diversifying its lending portfolio to include SME finance and consumer credit
- Strengthening its risk management framework to maintain asset quality amid growth
- Exploring strategic partnerships for co-lending and fintech integration
Conclusion
Finkurve Financial Services Ltd’s decision to consider a Rs 17.7 crore NCD issuance marks a strategic move to bolster its financial capacity and support business expansion. With a structured offering, attractive yield, and secured backing, the debentures are poised to attract investor interest while enabling the company to scale its lending operations. As the board meets to finalize the proposal, stakeholders will be watching closely for execution timelines and future fund-raising plans.
Sources: Finance Saathi, JM Financial Services, Business Standard, Trendlyne
