Auto Ancillary Stock Raises Rs 550 Crore Through NCD Issue to Strengthen Funding Base

On Thursday, Indian equity benchmark indices traded higher, with the benchmark Nifty 50 index rising 11.70 points (0.05 per cent) to 23,926.15. Amid the market movement, Balkrishna Industries share price rose 1.19 per cent to Rs 2,356.80 after the company approved the issuance of non-convertible debentures (NCDs) worth up to Rs 550 crore through a private placement.

The Finance Committee of the Board of Directors approved the issuance of 55,000 rated, listed, senior, unsecured, redeemable, non-cumulative non-convertible debentures with a face value of Rs 1 lakh each. The total principal amount of the issue is up to Rs 550 crore.

Balkrishna Industries Approves Rs 550 Crore NCD Issue

The fund raising will be carried out through a private placement route to eligible investors permitted under applicable regulations. The NCD issuance will be divided into three series, each carrying different maturity periods and coupon rates.

Series I debentures will have a tenure of 1 year, 11 months and 29 days from the date of allotment, with maturity scheduled for September 1, 2028. Series II will mature after three years from the allotment date, while Series III will have a four-year tenure with maturity on September 3, 2030.

The coupon rates for the three series have been set at 7.35 per cent per annum, 7.38 per cent per annum and 7.40 per cent per annum, respectively.

Debentures to Be Listed on BSE

The NCDs will be listed on BSE Limited, providing investors with a listed debt instrument. The company has classified the securities as unsecured instruments, with details regarding payment schedules, redemption and other terms specified in the key information document.

BKL also confirmed that there has been no cancellation or termination of the proposed issuance.

Fund Raise to Support Corporate Requirements

The latest fund raising exercise provides Balkrishna Industries with additional access to long-term debt capital. The issuance of NCDs allows the company to diversify its funding sources through the debt market while maintaining flexibility in managing its capital requirements.

With multiple maturity periods ranging from nearly two years to four years, the structure provides staggered repayment timelines across the three series.

About Balkrishna Industries

Balkrishna Industries is a manufacturer of off-highway tyres catering to specialised segments such as agricultural, industrial, construction and mining equipment.

The company operates under the BKT brand and has a global presence, supplying tyres across multiple international markets. It focuses on developing specialised tyre solutions for niche applications and serves customers across various industrial sectors. The company has established manufacturing capabilities and exports its products to markets worldwide, with a focus on strengthening its position in the off-highway tyre segment.
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Disclaimer: The article is for informational purposes only and not investment advice.