Regency Fincorp is borrowing ₹60 cr to grow its lending book
The nano-cap NBFC signed two separate debt deals. The second, larger one includes a greenshoe option and is non-binding for now.
What's new
- Regency Fincorp raised ₹10 cr from LC Venture Debt Fund via a secured NCD on June 2.
- It signed a non-binding term sheet for a second NCD of ₹25 cr base + ₹25 cr greenshoe, due third week of June.
- Both deals are secured by a 1.25x charge on loan receivables and carry personal guarantees from the promoter and CFO.
Why this matters
The ₹60 crore raise is equal to over 21% of Regency's ₹280 crore market capitalisation. That's a big capital call for a nano-cap, and it's secured against its own loan book. The personal guarantees from the promoter and CFO signal a high degree of commitment to the MSME and digital lending growth plan. The first tranche is closed; the second is not yet binding.
What we're watching
- Execution of the larger ₹50 cr NCD in the third week of June, given its term sheet is non-binding.
- How quickly the new capital gets deployed into the loan book and what the cost of debt looks like.
- Any subsequent rating actions or disclosure on the yield offered to NCD investors.
The full read
Regency Fincorp, a nano-cap NBFC with a ₹280 crore market value, is raising up to ₹60 crore in debt. The first ₹10 crore is done, via a secured NCD from LC Venture Debt Fund closed on June 2. The second, a listed NCD of ₹25 crore base with a ₹25 crore greenshoe, is under a non-binding term sheet with execution targeted for the third week of June. Both are secured by a 1.25x charge on loan receivables, and the promoter and CFO have given personal guarantees. The raise represents over 21% of the company's market cap. For a firm this size, the guarantee structure and the scale of the borrowing signal a push to scale the MSME and digital lending book. The second tranche isn't binding yet.
Questions answered
- What did Regency Fincorp raise and from whom?
- It raised ₹10 crore from LC Venture Debt Fund via a secured NCD executed on June 2. A second, larger transaction of ₹25 crore base plus a ₹25 crore greenshoe is under a non-binding term sheet.
- What is the money for?
- The company will use the proceeds for onward lending, specifically to grow its MSME and digital lending businesses.
- What is the scale of this raise relative to the company?
- The ₹60 crore total is equivalent to more than 21% of Regency Fincorp's ₹280 crore market capitalisation. The first ₹10 crore tranche is already closed.
- How are the debentures secured?
- Both NCDs are secured by a 1.25x charge on the company's performing loan receivables and include personal guarantees from the promoter and the CFO.