Capri Global Capital board clears up to Rs 4,000 crore fundraise as expansion plans gather pace

Capri Global Capital Ltd has received board approval to raise up to Rs 4,000 crore through equity shares, debt securities, convertible securities, warrants or other instruments, providing the non-Banking finance company with broad funding flexibility as it pursues branch-led expansion and loan-book growth.

The approval was granted at the board meeting held on October 14, 2026, and remains subject to regulatory and statutory clearances, including shareholder approval where necessary. The meeting began at 6:30 p.m. and concluded at 7:15 p.m.

The company can raise the funds in one or more tranches through routes including a rights issue, preferential allotment, public issue, qualified institutions placement, Foreign Currency Convertible Bonds and External Commercial Borrowings. However, Capri has not disclosed the planned mix between equity and debt, the number of securities, pricing, investor allocation or the timeline for individual tranches.

That distinction will be important for investors. A sizeable equity or convertible component could increase the company’s capital base but may result in dilution, while debt-led funding would preserve equity ownership but raise borrowing and leverage considerations. The proposed amount is equivalent to about 16.8 per cent of Capri’s market capitalisation of Rs 23,837.4 crore, although the final impact will depend on the structure eventually selected.

The capital-raising approval comes after a strong June 2026 quarter and alongside an ambitious expansion programme. Capri reported net sales of Rs 1,576.48 crore for the June quarter, up 57.05 per cent year-on-year and 13.83 per cent sequentially. Profit after Tax more than doubled year-on-year to Rs 353.38 crore, while the PAT margin improved to 22.42 per cent from 17.42 per cent a year earlier.

Management has previously identified gold loans as its principal growth engine, supported by improving branch productivity and a strategy of focusing on smaller-ticket loans that carry relatively better yields. It has targeted the addition of 400 gold-loan branches by December 2026, with expansion focused on southern and eastern India.

The company has also raised its FY28 assets under management target to Rs 65,000 crore and reiterated an ambition to grow AUM at more than 30 per cent compounded annually. In this context, the board approval potentially gives Capri access to capital across several channels to finance loan growth, branch additions and broader funding requirements.

Management had said borrowing costs were likely to remain broadly stable during FY27, indicating that future profitability improvements may rely more on product mix, fee income and operating leverage than on lower funding costs. The company is also building insurance and car-loan distribution streams to diversify non-interest income.

Still, faster expansion in gold lending will require close monitoring of portfolio concentration and collateral risk. Management has indicated that gold loans could account for about 55 per cent of AUM over the medium term. It has maintained that the portfolio is protected by a disbursement loan-to-value ratio of around 71 per cent and automated margin-call mechanisms if loan-to-value levels breach 85 per cent.

As of 12:30 p.m. on October 15, 2026, Capri Global Capital shares were trading at Rs 247.25, down 0.2 per cent from the previous close of Rs 247.75. The stock has gained 31.26 per cent over the past year, outperforming the BSE 500, which declined 5.86 per cent over the same period. At the stated price, the shares were about 11.9 per cent below their 52-week high of Rs 280.50.

Capri said further details will be disclosed after the terms and conditions of the proposed issuance are finalised. The choice between equity, debt and hybrid securities will determine the eventual implications for capital adequacy, funding costs and shareholder dilution.

Disclaimer: The article is for informational purposes only and not investment advice.