Spandana Sphoorty Financial in a listing on Sunday, on BSE Limited said that a meeting of the Management Committee of the Board of Directors will be held on November 16, 2022. The meeting is being held "to consider and approve the issue and offer of Non-Convertible Debentures (NCDs) on a private placement basis."
The company was quoting at Rs 580.05, up Rs 1.85 on the BSE.
They had earlier, in a similar manner, announced that the meeting of the Board of Directors for the discussion to approve the issue and offer of NCDs would be held on November 1, 2022.
What are NCDs?
Debentures are long-term financial instruments that are issued by a company for a specified tenure with a simple promise to pay a fixed interest to the investors. There are two types of debentures - convertible debentures and non-convertible debentures. The non-convertible debentures or NCDs are those debentures that cannot be converted to equity or shares and its interest rate depends on the company that is issuing the NCD.
NCD investments can be held by banking companies, individuals, primary dealers, and other corporate bodies registered or incorporated in India as well as unincorporated bodies.
NCDs are listed on the stock market and are easily tradable, the investment will only be in demat form and has a low risk as only companies with good credit ratings can issue NCDs.
NCDs issued in September
The board in September approved the allotment of 600 non-convertible debentures on a private placement basis. It was for an aggregate consideration of Rs 60 crore, with allotted 600 senior, rated, secured, listed, transferable, redeemable, principal protected and market linked non-convertible debentures for Rs 10 lakh each.
The tenure for the issued NCDs was 18 months, and the date of their maturity is March 9, 2024 and the interest rate is based on the performance of the reference index of 10-year government securities at 6.54 per cent GS 2032.
Spandana Sphoorty Financial
Spandana, a rural-focused Non-Banking Financial (NBF) and a microfinance lender was incorporated in 2003 and was classified as an Non-Banking Financial Company (NBFC) in 2015. This was after it took over the microfinance operations of a non-governmental organisation that was started by Padmaja Reddy in 1998.
The company in the second quarter reported a consolidated net profit of Rs 55.15 crore, lower than that of the last financial year, where it was Rs 57.94 crore. While the total income declined by 21.7 per cent year-on-year to Rs 310.15 crore.
