NBFC Stock Raises Rs 100 Crore Through NCD Issue; Strengthens Lending Capacity

On Wednesday, Indian equity benchmark indices traded lower, with the benchmark Nifty 50 index falling 141.35 points (0.59 per cent) to 23,914.45. Amid the market movement, Laxmi India Finance share price fell 0.87 per cent to Rs 125.93 after the company raised Rs 100 crore through the private placement of secured, listed non-convertible debentures (NCDs).

The fund raise comes as the retail-focused non-banking financial company continues to expand its MSME-focused lending portfolio and strengthen its liability profile.

Laxmi India Finance Completes Rs 100 Crore NCD Issue

The Business Operation Committee of Laxmi India Finance's Board approved the allotment of 1,00,000 rated, listed, unsubordinated, secured and redeemable NCDs at its meeting held on September 2, 2026.

The issuance comprises two series:

• Series A: 70,000 debentures aggregating Rs 70 crore
• Series B: 30,000 debentures aggregating Rs 30 crore

Both series have a face value of Rs 10,000 per debenture and carry a coupon rate of 10.50 per cent per annum, with interest payments scheduled on a monthly basis.

The NCDs have a tenure of 36 months, with allotment completed on September 2, 2026, and maturity scheduled for September 2, 2029. The securities will be listed on the wholesale debt market segment of BSE Limited.

The principal repayment will take place on a pro-rata basis under the respective redemption schedules, with complete redemption due on maturity.

Secured Debentures to Support Funding Mix

The newly issued NCDs are backed by a first and exclusive charge over identified receivables created through hypothecation in favour of the debenture trustee representing NCD holders. The company confirmed that there has been no cancellation or termination of the proposed issuance.

The Rs 100 crore fund raise provides additional resources as Laxmi India Finance continues to scale its lending operations across semi-urban and rural markets.

NCD Issue Equivalent to Nearly 6% of AUM

Laxmi India Finance reported assets under management (AUM) of Rs 1,721.74 crore at the end of the June 2026 quarter. The latest NCD issuance is equivalent to around 5.8 per cent of its AUM.

The company's total borrowings stood at Rs 1,496.79 crore as of June 30, 2026, making the fresh fund raise equivalent to approximately 6.7 per cent of its borrowing base.

The company has been working towards diversifying its funding sources as it expands its loan portfolio. During the June quarter, banks, public-sector banks and small finance banks remained key contributors to its borrowing profile, while NCDs accounted for 3.49 per cent of the overall funding mix.

The latest issuance adds a longer-tenor market borrowing instrument to the company's liability profile.

Loan Book Growth Led by MSME Portfolio

Laxmi India Finance has been expanding its lending operations with a focus on MSME financing. During the June quarter, the company's AUM increased 27.91 per cent year-on-year, supported by disbursements of Rs 232 crore.

The MSME segment remained the largest contributor to the loan book with AUM of around Rs 1,393.8 crore. Other lending segments include vehicle finance, construction and loan-against-property, wholesale lending and personal loans.

The company has also been expanding its branch network to support growth. It had 184 branches at the end of the June quarter and plans to add around 30-35 branches during FY2026-27, particularly in newer and underpenetrated markets.

Borrowing Cost Declines; Asset Quality Remains a Key Monitor

Laxmi India Finance's cost of borrowing declined to 10.66 per cent in the June quarter, improving by 67 basis points year-on-year. The improvement was supported by better access to bank funding and an external rating upgrade to A/Stable. The 10.50 per cent coupon rate on the newly issued NCDs is marginally below the reported quarterly average borrowing cost. However, asset quality remains an important factor for the lender.

The company reported gross non-performing assets (GNPA) of 2.08 per cent and net non-performing assets (NNPA) of 0.93 per cent in the June quarter. The company has stated that these reported figures were impacted by exposure to Upmoney, against which substantial provisions had already been created.

The latest NCD issuance strengthens Laxmi India Finance's borrowing capacity without impacting equity capital, while supporting its plans for further loan book expansion. The company's shares have declined 11.20 per cent over the previous one year as of September 1, 2026, according to available market data.
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Disclaimer: The article is for informational purposes only and not investment advice.