Latest news with #CareEdgeRatings
Mint
16 hours ago
- Business
- Mint
Retail investors chased 13% yields—TruCap gave them a default
On 18 July, CareEdge Ratings downgraded ₹150 crore worth of TruCap Finance bonds to 'D', or default, along with ₹750 crore of long-term bank facilities. The ratings agency cited the company's failure to pay interest and principal on its non-convertible debentures (NCDs) due on 16 July. The development has left a trail of retail investors in distress, as these bonds were widely distributed via online bond platform providers (OBPPs) such as Golden Pi, Grip Invest, Alitifi (by Northern Arc), and BondsIndia. These NCDs were first issued in January 2024 via Northern Arc, with subsequent tranches distributed through other platforms. Originally rated BBB and offering coupon rates of 13-13.5%, the bonds were sold in ticket sizes as low as ₹1 lakh. TruCap, a listed non-banking financial company focused on gold and loans for micro, small and medium enterprises (MSMEs), saw its stock plunge 61.4% over the past year (as of 18 July). The company was in the process of being acquired by the Marwadi Chandrana Group, but delays in committed fund transfers played a role in precipitating the default. A person familiar with the matter estimated that around 1,100 investors were impacted, adding that the total outstanding principal owed to retail investors stands at around ₹55 crore. A spokesperson for TruCap said the company is committed to repaying all dues in full. The company has ₹370 crore of net debt outstanding, of which ₹270 crore is not NCDs. As for the default of ₹72 crore of NCDs, the company repaid 15% between 18 and 21 July, the spokesperson said. TruCap has been at the centre of acquisition talks in recent months. InCred Finance was set to purchase its gold loan portfolio via a slump sale in February, but the transaction did not materialize as the Marwadi Chandrana Group wanted to acquire the entire company along with the gold portfolio. 'As on May 31, 2025, TruCap Finance Ltd's liquidity profile remained stretched given the debt repayments of ₹103 crore over the next three months against unencumbered cash and cash equivalents of ₹57 crore," CareEdge Ratings said in a note accompanying its downgrade. 'However, CareEdge Ratings had drawn comfort from the expected collection of ₹92 crore during the same period, fund infusion of ₹10 crore from the existing promoters and of ₹100 crore from the Marwadi Chandarana Group (MCG), of which the first tranche of ₹50 crore was expected by June 15, 2025, and the remaining ₹50 crore scheduled in July 2025," it added. The delay in debt servicing was due to non-receipt of committed funds and premature redemption of NCDs, which resulted in a liquidity squeeze for TruCap, CareEdge said, adding that its rating action was based on its policy on default recognition. Bonds break trust Some online bond platform providers had already flagged concerns. 'We had disabled trading in TruCap on Bondbazaar due to its small size and lack of operational information," said Suresh Darak, chief executive of Bondbazaar. Wint Wealth and IndiaBonds also did not list the TruCap bonds. CareEdge Ratings had issued warnings even before it downgraded TruCap bonds to D. 'The company's gearing levels also deteriorated due to erosion in net worth as on March 31, 2025. The ratings continue to reflect constraints arising from TruCap Finance Ltd's (TFL) moderate resource profile and persistent asset quality challenges, particularly within its unsecured business loan segment," CareEdge said in a note dated 4 June. 'Moreover, the company reported covenant breaches with certain lenders during FY25, although waivers were obtained in some instances." TruCap Finance swung to a net loss of ₹66.60 crore in FY25 from a net profit of ₹11.71 crore in FY24. This was primarily because the company's credit cost rose significantly to ₹72.80 crore in FY25 from ₹4.11 crore in the previous year, CareEdge said in its June report. 'As on March 31, 2025, TFL reported GNPA (gross non-performing asset) and NNPA of 3.70% and 2.20% on AUM (assets under management) respectively, compared to levels of 1.32% and 0.83% reported, as on March 31, 2024 primarily attributed to decline in AUM, driven by portfolio run-off and limited disbursement during FY25," the rating agency said. 'Further the company is also experiencing increased stress among the unsecured business loan segment, in line with the industry," CareEdge added. Ajai James, a software consultant based in Cochin, Kerala, invested ₹3 lakh in TruCap bonds through one of the online bond platforms on 15 May 2024 as he sought to diversify from equities. But on 16 July 2025, instead of receiving his principal and interest, he received an email from the bond platform announcing the default. 'The company and its promoters are currently evaluating all viable options to address this situation and have assured stakeholders that they are committed to an early resolution," the online platform said in its email to TruCap bond investors. 'I heard bonds are safer than stocks. I figured that might not actually be correct," said James over a phone call to Mint. Default or delay? CareEdge had first rated TruCap's bond and long-term bank facilities BBB (positive) in January 2024 but downgraded it one notch to BBB- in February 2025. Another downgrade in June 2025 brought the rating to BB+, two notches below investment grade, giving investors the right to demand early redemption. Catalyst Trusteeship Ltd, the bond trustee, said in an email to investors that TruCap had requested debenture holders to waive this right, but failed to obtain the majority approval in time. The issuer then committed to making full repayment on 16 July 2025. That deadline passed without payment, and the expected funding from the Marwadi Group did not come through. The Marwadi Group's open offer for TruCap shares remains live. Following the default, Catalyst indicated that TruCap had begun making partial repayments—5% of outstanding dues were cleared on 18 July and another 10% on 21 July. 'I would not call this a default. I would rather call it a payment delay," said an executive at one of the online platforms that sold TruCap bonds, speaking on condition of anonymity. 'The original due date was on a later date. The recent delay was due to mandatory early closure of the NCDs due to a covenant breach." The first signs of trouble had emerged as far back as October, when TruCap started breaching covenants linked to its bond agreements. But despite mounting financial pressures and rating downgrades, TruCap managed to meet its obligations until the missed payment on 16 July this year. A meeting of debenture holders has been scheduled for 8 August to decide the next course of action. Catalyst did not respond to queries fromMint. There is no clarity yet on what steps is Catalyst planning. Regulators have so far remained silent. AMint query to the Securities and Exchange Board of India went unanswered. Risk meets retail The incident has reignited debate around the role of online bond platforms and the suitability of direct bond investments for retail investors. 'Retail investors should consider the potential risks associated with bonds and not focus solely on the coupon rates offered by bond issuers," said Abhishek Kumar, a Sebi-registered investment adviser and founder of Sahaj Money. 'Usually, bond issuers who offer higher coupon rates do it to compensate for the higher risk of default associated with those bonds." 'OBPP acts as a matchmaker between retail investors and bond issuers. However, they are compensated through fees collected from bond issuers to promote the bonds, so the entire risk is borne by the investors and not by OBPP. Retail investors should consider all this before investing directly in these bonds," Kumar added. Nikhil Aggarwal, founder of Grip Invest, pointed out that all investments carry risk. 'Developments at TruCap seem to be the result of a delay in receiving equity financing combined with an earlier-than-expected redemption of the bonds. Since the underlying loan portfolio of nearly ₹1,000 crore continues to repay interest and principal, the next 8-10 weeks will showcase the final impact to investors," Aggarwal said. Vishal Dhawan, another Sebi-registered investment adviser and founder of Plan Ahead Wealth Advisors, said most investors may be better off investing in debt mutual funds unless they have the ability to dedicate time to their bond portfolio. 'Retail investors can consider investing in bonds provided they have the ability to keep track of the changes in financials of the companies issuing the bonds, and the constant shifts in ratings that may accompany them as well. Chasing the highest yields may not be a good strategy as the sustainability of returns along with principal payback are critical determinants." said Dhawan.
Fashion Value Chain
6 days ago
- Business
- Fashion Value Chain
CareEdge, NSE Partner to Advance African Capital Markets
CareEdge Global IFSC Ltd, a subsidiary of CareEdge Ratings, has formalized a strategic Memorandum of Understanding (MoU) with the Nairobi Securities Exchange (NSE) to support capital market advancement in Africa. This alliance will enable deep collaboration in knowledge exchange, capacity development, and analytical insights, aimed at fostering innovation, strengthening investor confidence, and supporting financial inclusion. As part of the MoU, CareEdge Global will operate as a Knowledge Partner, Rating Partner, and Strategic Collaborator to NSE. The collaboration includes co-hosted events, expert panels, training programs, and global delegation participation designed to enhance transparency and market maturity. Mehul Pandya, MD & Group CEO of CareEdge, said, 'This milestone partnership allows us to extend our analytical capabilities to support African capital market growth, enabling innovation and building resilient systems.' NSE CEO Frank Lloyd Mwiti highlighted, 'This collaboration strengthens our market intelligence and aligns with our goal to position Nairobi as a leading financial hub in Africa.' Revati Kasture, CEO, CareEdge Global IFSC Ltd, added, 'This partnership empowers institutions through strategic insight and value-driven collaboration.' Saurav Chatterjee, CEO, CareEdge Ratings Africa, noted, 'As we expand our Africa presence, this alliance becomes a critical step toward analytics-driven market development and reform.' Aakash Jain, Head of Corporate Affairs, CareEdge Ratings, stated, 'This initiative exemplifies CareEdge's commitment to global partnerships through meaningful engagement in data and policy.' David Wainaina, Head of Trading & Analytics at NSE, remarked, 'The partnership will elevate our analytics infrastructure, enabling smarter trading and data-led decision-making.' The MoU underscores mutual goals of market integration between India and Africa, promoting research-led frameworks, policy dialogues, and economic development through informed collaboration.
Time of India
6 days ago
- Business
- Time of India
Relaxed FGD norms to save thermal power plants ₹19,000-₹24,000 crore annually: CareEdge Ratings
The Centre's decision to relax the mandatory installation of flue-gas desulphurisation (FGD) systems for most coal-based thermal power plants is projected to save them a substantial ₹19,000 crore to ₹24,000 crore in annual tariff expenses. This translates to a saving of ₹0.17 to ₹0.22 per unit of tariff, according to CareEdge Ratings , as reported by IANS. The revised framework, announced last week by the Ministry of Environment, Forest and Climate Change, introduces a differentiated compliance approach. Under the new rules, FGD mandates will now primarily apply to plants located within 10 kilometers of cities with a population exceeding one million, and will also consider the sulphur content of the coal used. The new rules exempt the majority of India's thermal power plants from installing FGD systems. Positive impact on thermal independent power producers The report highlights that the exemption of Category C plants, which represent 80 per cent of the capacity for which FGD was yet to be implemented, is a major positive for thermal independent power producers (IPPs). According to CareEdge Ratings estimates, this will reduce the capital expenditure burden by a significant ₹87,000 crore to ₹1,16,000 crore, assuming a capital expenditure of ₹0.6-0.8 crore per MW. Sabyasachi Majumdar, Senior Director at CareEdge Ratings, said, "The exemption of Category C projects from implementation of FGD is a positive for thermal power producers since such projects comprise 80 per cent of the capacity for which FGD is yet to be implemented. This would also ease the burden of the impending tariff hike to compensate for the FGD capital expenditure." Coal-Based power remains energy backbone Despite the increasing focus on renewable energy, coal-based power generation continues to be the bedrock of India's power sector. It accounted for approximately 75 per cent of the total generation in FY2025, even though it only represents 47 per cent of the total installed capacity. This disparity is attributed to the higher Plant Load Factor (PLF) of coal-based plants compared to renewable and hydroelectric sources. Looking ahead, the report projects that the share of coal-based plants in power generation will remain significant, at around 60 per cent by FY2030. Furthermore, with overall energy consumption on the rise, the total off-take of thermal power is expected to remain substantial, reaching around 1,233 billion units in FY2030.
Time of India
6 days ago
- Automotive
- Time of India
India's EV charging infra expands 5-fold, yet 1 station serves 235 vehicles
India's electric vehicle (EV) charging infrastructure is growing rapidly, with the number of public EV charging stations registering a five-fold increase from FY22 to early FY25, according to a report by CareEdge Ratings. The report stated that public EV charging stations (EVPCS) have grown significantly from just 5,151 in CY22 to 11,903 in CY23, and further to 25,202 by the end of FY24, reaching 26,367 in early FY25. This marks a compound annual growth rate (CAGR) of about 72 per cent over the three-year period from FY22 to FY25. It stated, "Charging infrastructure is scaling rapidly, with public EV stations growing over 5x from FY22 to early FY25." The report stated the rapid growth has been led by strong initiatives from the central and state governments. The Indian government has significantly stepped up efforts to boost public charging infrastructure across the country. Several state-level EV policies are also playing an important role by attracting both public and private investments into the sector. The report noted that this growth reflects the government's strong commitment to encouraging the adoption of electric vehicles in the country. Additionally, the Production Linked Incentive (PLI) Scheme for battery manufacturing, along with duty exemptions on key minerals, is expected to reduce India's import dependency by up to 20 per cent by FY27. This is likely to make EVs more affordable and help lower the overall cost of ownership. However, the report also pointed out a gap between the growth of EVs and the charging infrastructure. Currently, India has just one public charging station for every 235 electric vehicles on the road. It said, "With only 26,367 public EV charging stations available, India currently has around one charger for every 235 EVs on the road." This highlighted the need for continued and faster development of EV charging stations to keep pace with the increasing number of electric vehicles being sold in the country. Overall, while the EV charging network in India is expanding quickly, there is still a need for more balanced growth to fully support the transition to electric mobility.>
Time of India
6 days ago
- Automotive
- Time of India
India's EV charging infra expands 5-fold, yet 1 station serves 235 vehicles
India's electric vehicle (EV) charging infrastructure is growing rapidly, with the number of public EV charging stations registering a five-fold increase from FY22 to early FY25, according to a report by CareEdge Ratings. The report stated that public EV charging stations (EVPCS) have grown significantly from just 5,151 in CY22 to 11,903 in CY23, and further to 25,202 by the end of FY24, reaching 26,367 in early FY25. This marks a compound annual growth rate (CAGR) of about 72 per cent over the three-year period from FY22 to FY25. It stated, "Charging infrastructure is scaling rapidly, with public EV stations growing over 5x from FY22 to early FY25." The report stated the rapid growth has been led by strong initiatives from the central and state governments. The Indian government has significantly stepped up efforts to boost public charging infrastructure across the country. Several state-level EV policies are also playing an important role by attracting both public and private investments into the sector. The report noted that this growth reflects the government's strong commitment to encouraging the adoption of electric vehicles in the country. Additionally, the Production Linked Incentive (PLI) Scheme for battery manufacturing, along with duty exemptions on key minerals, is expected to reduce India's import dependency by up to 20 per cent by FY27. This is likely to make EVs more affordable and help lower the overall cost of ownership. However, the report also pointed out a gap between the growth of EVs and the charging infrastructure. Currently, India has just one public charging station for every 235 electric vehicles on the road. It said, "With only 26,367 public EV charging stations available, India currently has around one charger for every 235 EVs on the road." This highlighted the need for continued and faster development of EV charging stations to keep pace with the increasing number of electric vehicles being sold in the country. Overall, while the EV charging network in India is expanding quickly, there is still a need for more balanced growth to fully support the transition to electric mobility.>
