Usha Financial Services Ltd (USHA FIN) has formally approved the issuance of non-convertible debentures (NCDs) via a private placement route, marking a strategic move to raise debt capital to support its business expansion plans and financial stability.
The approval was granted during the company’s board meeting held on August 6, 2025, where directors considered and sanctioned the offer and issuance of secured redeemable NCDs with an interest rate of 12% per annum.
These debentures are set to be allotted to eligible investors under regulatory compliance, enhancing USHA FIN’s liquidity position and enabling the funding of lending activities, particularly in sectors like MSMEs, NBFCs, and electric vehicle financing where the company operates.
Usha Financial Services Ltd is a non-banking financial company (NBFC) registered with the Reserve Bank of India, focused on providing diversified financing solutions primarily to NBFCs, corporates, MSMEs, and women entrepreneurs.
The move to issue NCDs aligns with the company’s broader strategy to optimize its capital structure, reduce borrowing costs, and improve operational flexibility amid increasing demand for credit.
The NCD issuance will be secured and redeemable, offering investors a fixed income product with a defined maturity, appealing to conservative and income-focused investors.
Usha Financial Services’ recent financial performance shows steady revenue growth and profitability, supported by a well-diversified loan portfolio and increasing market recognition in niche lending segments such as electric vehicle financing.
The company has a history of prudent capital management and responsive funding approaches, with this NCD issuance further demonstrating its commitment to sustainable growth while maintaining investor confidence.
Market analysts view the NCD issue positively as it strengthens the company’s balance sheet while supporting expansion and new product launches planned for the upcoming fiscal periods.
Company Background and Business Focus
Founded in 1995 and headquartered in Delhi, Usha Financial Services has evolved from a private limited company to a publicly listed NBFC specializing in investment and credit. The firm’s clientele includes several NBFCs, MSMEs, women entrepreneurs, and corporates. It offers a range of loan products, including working capital finance, term loans, and specialized financing for emerging sectors like electric vehicles.
Usha Financial’s ability to target underserved segments and customize credit offerings has resulted in a growing loan book with healthy asset quality ratios. Its strategic focus on supporting smaller NBFCs and MSMEs positions it well in a competitive financial landscape.
Details of the NCD Issuance
The board-approved NCDs carry a coupon rate of 12%, offering attractive fixed returns to investors. The debentures will be secured, providing reassurance about the underlying asset quality backing these instruments. Redemption terms and tenure specifics will be detailed in the official offer documents following regulatory approvals.
The private placement nature of the issuance indicates the company’s intent to selectively raise funds from institutional investors, mutual funds, and high-net-worth individuals, thereby ensuring efficient deployment of capital.
Strategic Importance and Market Impact
This issuance will augment Usha Financial’s liquidity buffer, support ongoing lending operations, and provide capital for new growth avenues. With credit demand rising in priority sectors such as electric vehicles and MSMEs, having a robust funding base is critical to maintaining competitive agility.
The debenture offer also reflects the company’s intention to diversify its funding mix beyond bank borrowings and equity, reducing dependency on a single source and mitigating refinancing risks.
Outlook and Forward View
With the funds from this NCD issuance, Usha Financial Services is expected to accelerate loan disbursals and expand into adjacent financial products, enhancing its value proposition to customers. Given the company’s consistent track record, investors will likely see this as a positive development pointing to operational resilience.
Looking ahead, the firm plans to continue leveraging capital markets and institutional funding opportunities to balance growth ambitions with prudent risk management, aiming for sustainable shareholder returns.
Summary
Usha Financial Services Ltd’s decision to approve the issuance of non-convertible debentures underscores its proactive approach to capital management amid growing business opportunities. With a secured, 12% yield product aimed at institutional investors, this step will enhance the company’s financial strength and capacity to serve expanding credit demands in key segments.
The move reflects confidence in the company’s strategic direction and supports its evolution as a niche financing specialist within India’s NBFC sector.
Sources: Usha Financial Services Ltd official NSE filings, company board meeting disclosures, ICICI Direct, Economic Times, Moneycontrol
