Description

Amendment to debt securities Series 14 of Veritas Finance Private Limited, reducing coupon rate from 10.35% to 8.50% effective June 23, 2025.

Summary

BSE has issued an update regarding amendments to the debt securities of VERITAS FINANCE Pvt Ltd. The company is reducing the coupon rate on its Series 14 debentures (originally designated as 10.35%-Series 14-VFPL2028, now renamed to 8.50%-Series 14-VFL2028) effective June 23, 2025. The interest rate will decrease from 10.35% per annum net (10.9477% gross) to 8.50% per annum net for the remaining tenure until maturity.

Key Points

  • Security name changed from “10.35%-Series 14-VFPL2028” to “8.50%-Series 14-VFL2028”
  • Coupon rate reduction of 1.85% per annum (from 10.35% to 8.50% net of withholding taxes)
  • Two-tier interest rate structure: original rate until June 22, 2025, reduced rate from June 23, 2025 onwards
  • Interest payment frequency remains semi-annual
  • Changes apply to multiple sections of the Placement Memorandum including Section 5, Section 8, Section 10, and Annexure VI

Regulatory Changes

The amendments affect the following sections of the Placement Memorandum:

  • Section 5 (Regulatory Disclosure): Security name updated to reflect new coupon rate
  • Section 5 - Coupon Rate: Split structure with 10.35% p.a. net (10.8751% gross) until June 22, 2025, then 8.50% p.a. net (gross rate not specified) from June 23, 2025 until maturity
  • Section 8 & Section 5 - Interest on Application Money: Updated to reflect two-tier rate structure
  • Section 10 - Particulars of the Offer: Rate of interest/coupon updated with bifurcated rates
  • Annexure VI (Illustration of Bond Cash Flows): References Annexure III (existing) and Annexure IV (amended)

Compliance Requirements

Investors and market participants should:

  • Note the revised security name for trading and settlement purposes
  • Update records to reflect the reduced coupon rate effective June 23, 2025
  • Review amended bond cash flow illustrations (Annexure IV)
  • Adjust yield and return calculations based on the new interest rate structure

Important Dates

  • June 22, 2025: Last day of 10.35% p.a. net coupon rate (10.9477% gross)
  • June 23, 2025: Effective date of reduced 8.50% p.a. net coupon rate (continuing until maturity)

Impact Assessment

Impact on Investors: This represents a material adverse change for debenture holders, reducing their interest income by approximately 17.9% (from 10.35% to 8.50% net). Investors who purchased these securities expecting 10.35% returns throughout the tenure will experience reduced cash flows from mid-2025 onwards.

Market Impact: The coupon rate reduction may affect the secondary market trading price of these debentures. Existing holders may experience mark-to-market losses if market yields do not adjust proportionally. The change reflects either improved credit profile of the issuer, changes in market conditions, or restructuring of debt terms.

Operational Impact: The amendment requires updates to trading systems, investor records, and interest payment calculations for all stakeholders including brokers, custodians, and the exchange.

Impact Justification

Material change to debt security terms affecting investor returns through significant coupon rate reduction of 1.85% p.a. effective mid-2025