Description

BSE notifies amendments to debt securities of VERITAS FINANCE Pvt Ltd, including change in security name and reduction in 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 (Series 14). The key changes include modification of the security name from “10.35%-Series 14-VFPL2028” to “8.50%-Series 14-VFL2028” and a reduction in the coupon rate from 10.35% per annum to 8.50% per annum, effective from June 23, 2025. The changes impact multiple sections of the Placement Memorandum including interest calculations and bond cash flow illustrations.

Key Points

  • Security name changed from “10.35%-Series 14-VFPL2028” to “8.50%-Series 14-VFL2028”
  • Coupon rate reduced from 10.3500% p.a. net (10.9477% gross) to 8.50% p.a. net (10.8751% gross) from June 23, 2025
  • Original coupon rate of 10.3500% p.a. net remains applicable till June 22, 2025
  • Interest payable semi-annually on net basis after withholding taxes
  • Amendments affect multiple sections of Placement Memorandum: Section 5, 8, 10, and Annexure VI

Regulatory Changes

The amendments update the following clauses in the Placement Memorandum:

  1. Section 5 (Regulatory Disclosure) - Security Name: Updated to reflect new name “8.50%-Series 14-VFL2028”

  2. Section 5 - Coupon Rate: Modified to show bifurcated interest rates:

    • Till June 22, 2025: 10.3500% p.a. net (10.9477% gross)
    • From June 23, 2025 till Maturity: 8.50% p.a. net (10.8751% gross)

  3. Section 5 & 8 - Interest on Application Money: Updated to reflect dual rate structure

  4. Section 10 - Particulars of the Offer: Rate of Interest/Coupon amended with transition date

  5. Annexure VI - Bond Cash Flows Illustration: References updated from Annexure III to Annexure IV to reflect revised cash flows

Compliance Requirements

  • Investors and market participants should note the revised coupon rate applicable from June 23, 2025
  • Updated Placement Memorandum provisions to be referred for accurate interest calculations
  • Bond cash flow calculations to follow revised Annexure IV instead of Annexure III

Important Dates

  • June 22, 2025: Last date for original coupon rate of 10.3500% p.a. net
  • June 23, 2025: Effective date for reduced coupon rate of 8.50% p.a. net
  • Maturity Date: Not specified in circular (Series 14-VFL2028 suggests 2028 maturity)

Impact Assessment

Impact on Investors: The coupon rate reduction of 1.85% per annum (from 10.35% to 8.50%) represents an 18% decrease in interest income for bondholders from June 23, 2025 onwards. This will reduce the total interest earnings over the remaining tenure of the debt securities.

Market Impact: Medium - affects existing holders of VERITAS FINANCE debt securities who will experience lower interest returns. The change may impact secondary market pricing and yield calculations for these securities.

Operational Impact: Requires updates to systems and records for accurate interest calculation, payment processing, and reporting for the affected debt series.

Impact Justification

Material change to debt instrument terms affecting investor returns - coupon rate reduced by 1.85% from June 2025 onwards