Salem Erode's NCD raise falls 39% short of target
The nano-cap NBFC allotted ₹92 lakh against a planned ₹1.5 crore, signaling weak demand at the offered 12% coupon.
— 4 earlier stories on Salem Erode Investments Ltd. →What's new
- Debenture committee allotted 9,200 unlisted NCDs of ₹1,000 each, raising ₹92 lakh
- Raise is 39% short of the ₹1.5 crore board-approved plan
- NCDs are secured against current assets and gold loan receivables
Why this matters
For a loss-making nano-cap NBFC with a market cap of just ₹46 crore, failing to raise the full amount suggests weak investor appetite. The ₹92 lakh raised is only 2% of market cap, so the impact is minimal, but the partial placement points to funding constraints for a company that posted a net loss of ₹484.66 lakh in FY26.
What we're watching
- Whether the company attempts a second tranche for the balance
- Impact on cost of funds if terms are renegotiated
- Liquidity position given negative networth trend
The full read
Salem Erode Investments' plan to raise ₹1.5 crore via NCDs has landed at just ₹92 lakh — a shortfall of 39%. The nano-cap NBFC allotted 9,200 unlisted secured NCDs at ₹1,000 face value, carrying a 12% coupon. For a company with a ₹46 crore market cap and trailing revenue down 19.7%, the weak take-up signals limited investor appetite. The ₹92 lakh raised is only 2% of market cap, so the direct financial impact is small. Yet the partial placement, added to a net loss of ₹484.66 lakh in FY26 and a debt-equity of 0.65, paints a picture of a firm struggling to access even modest debt markets.
Questions answered
- How much did Salem Erode raise via NCDs?
- It raised ₹92 lakh through 9,200 unlisted secured redeemable NCDs of face value ₹1,000 each on a private placement basis.
- Why is the shortfall significant?
- The company had board approval to raise up to ₹1.5 crore, but actual allotment was only 61% of that target, indicating weaker demand at the offered 12% coupon.
- How does this compare to the company's size?
- ₹92 lakh is just 2% of Salem Erode's ₹46 crore market cap, so the absolute shortfall is modest. However, the company reported a net loss of ₹484.66 lakh in FY26 and has seen revenue decline nearly 20%.
- What are the terms of these NCDs?
- The NCDs carry a 12% coupon as per the earlier board approval, are secured against current assets including gold loan receivables, and have Vistra ITCL India as the debenture trustee.
- Will the company try to raise the remaining ₹58 lakh?
- The filing does not disclose future plans. The board approved up to ₹1.5 crore, and only a partial allotment has been made so far. A subsequent tranche is possible but not confirmed.
Salem Erode Investments Ltd.
Latest quarter · Mar 2026
Leverage & growth
Story so far
All notes on SALEM →- 1 Jul 2026 · 4:54 PM IST Salem Erode's NCD raise falls 39% short of target
- 14d ago Salem Erode to raise ₹1.5 cr via unlisted NCDs at 12% coupon
- 41d ago Salem Erode Investments reports another year of losses
- 41d ago Salem Erode Investments posts annual loss of ₹484.66 lakh
- 41d ago Salem Erode Investments loses another ₹4.84 cr as net worth shrinks