Galada Finance Ltd, a Chennai-based non-banking financial company (NBFC), has taken an important step to bolster its financial position by approving the issuance of non-convertible debentures (NCDs) worth 200 million rupees. This move reflects the company's proactive strategy to raise funds through debt instruments to support its growth ambitions and operational expansion. The decision was finalized at the recent board meeting, signaling Galada Finance’s intent to capitalize on favorable market conditions and investor appetite.
Major Highlights Of The NCD Approval
Board of Directors of Galada Finance has formally approved the issuance of secured, unrated, unlisted, redeemable non-convertible debentures.
The total size of the NCD issue is fixed at 200 million rupees, marking a significant capital raise via the debt market.
The issuance is expected to provide the company with stable funding for business expansion and working capital needs.
An independent registered valuer will be appointed to ensure transparency and valuation accuracy as per regulatory guidelines.
The move also includes discussions about potential issuance of share warrants and/or equity shares on a preferential basis, pending further board consideration.
Understanding The Implications Of The NCD Issue
Non-convertible debentures are debt instruments that allow the company to raise capital without diluting shareholding, as these do not convert into equity. For Galada Finance, issuing NCDs brings a well-structured way of tapping investor funds with fixed income returns while preserving equity ownership integrity. The secured and redeemable nature of these NCDs adds investor confidence, assuring backing by company assets and a clear redemption timeline.
Furthermore, the unlisted status of the NCDs means trading will typically be limited, emphasizing the long-term investment aspect for investors and aligning with the company’s stable funding needs. This method of fundraising also reflects prudent financial management, as the company balances its capital mix between debt and equity.
Strategic Benefits Driving The Fundraising Decision
Galada Finance’s decision to raise 200 million rupees through NCDs parallels its positive financial performance and growth trajectory. The fresh capital infusion is poised to:
Enhance lending capacity to meet rising credit demand within its target markets.
Support infrastructure development and technological upgrades to improve operational efficiency.
Strengthen the company’s balance sheet to navigate competition and regulatory requirements effectively.
In the backdrop of a competitive NBFC sector with evolving customer expectations, this funding strategy equips Galada Finance with the financial muscle to capitalize on market opportunities, scale business operations, and diversify offerings.
Recent Financial Performance Lending Confidence
Galada Finance’s confidence in approving this NCD issue stems from its robust recent financial results. The company reported a 40.10% growth in revenue for the quarter ending June 2025 and improvements in profit after tax by 24.5%, showcasing resilience and operational strength amidst industry dynamics. This financial momentum supports the company’s ability to service debt efficiently, making the NCD issuance a credible and attractive offering for investors.
Market Reaction And Investor Outlook
The announcement of the NCD approval has prompted positive market attention, reflecting investor interest in debt instruments backed by sound financial fundamentals. The clear communication of terms, combined with regulatory compliance including appointing an independent valuer, is likely to enhance investor trust.
While the NCD route avoids equity dilution, it also introduces fixed interest obligations, so the company’s prudent cash flow management will be key to sustaining investor confidence in the long run. Overall, this fundraising initiative is seen as a proactive step towards balanced growth and financial stability.
Future Prospects And Regulatory Path
Going forward, Galada Finance will work through necessary regulatory approvals and finalize the terms of the NCD issue, including interest rates, tenure, and redemption schedule. Shareholders and stakeholders can expect periodic updates as the company executes this capital raising initiative.
The board’s consideration of share warrants and equity shares issuance alongside the NCDs indicates a flexible capital strategy designed to meet various funding needs while keeping strategic growth objectives intact.
Sources: BSE India, Business Standard, Economic Times, Moneycontrol
