Description

Revision of debenture trust deed covenants regarding shareholding requirements - reduction in minimum equity holding requirement from 51% by Indium IV to 26% by PG Lotus Pte. Ltd. following change in capital structure and management control.

Summary

BSE has issued an update regarding debt securities of Infinity Fincorp Solutions Private Limited. The circular notifies revisions to Clause 9.8(a) of the Debenture Trust Deed governing two ISINs (INE00VD07016 and INE00VD07032). The key changes involve relaxation of shareholding covenants following a change in controlling shareholder from Indium IV (Mauritius) Private Limited to PG Lotus Pte. Ltd., accompanied by capital infusion of up to Rs. 600 Crore and changes in management control and board composition.

Key Points

  • Revision of debenture trust deed covenants for ISIN INE00VD07016 (dated 30th September 2024) and ISIN INE00VD07032 (dated 1st April 2025)
  • Existing covenant required Indium IV (Mauritius) Private Limited to hold minimum 51% unencumbered equity share capital with management control
  • Revised covenant transfers control requirements to PG Lotus Pte. Ltd. (together with its affiliates and funds managed by it)
  • Minimum shareholding requirement reduced from 51% to 26% unencumbered equity share capital on fully diluted basis
  • PG Lotus Pte. Ltd. must maintain controlling stake and management control of the Issuer
  • Exemption for changes due to primary equity capital infusion or Initial Public Offer (IPO)
  • Exit of Indium IV from the company with release from obligations under letter of comfort
  • Capital infusion of up to Rs. 600 Crore by PG Lotus Pte. Ltd. and continuing shareholders
  • Changes in company’s capital structure and shareholding pattern
  • Changes in board of directors
  • Amendment/modification to constitutional documents

Regulatory Changes

The circular notifies amendments to Clause 9.8(a) of the Debenture Trust Deed:

Previous Requirement:

  • Indium IV (Mauritius) Private Limited required to hold minimum 51% unencumbered equity share capital
  • Management control to be maintained by Indium IV
  • Exception only for changes due to primary equity capital infusion

Revised Requirement:

  1. PG Lotus Pte. Ltd. (together with affiliates and managed funds) must maintain Controlling Stake and Management Control
  2. PG Lotus Pte. Ltd. (together with affiliates and managed funds) must hold minimum 26% unencumbered equity share capital on fully diluted basis
  3. Exception for changes due to primary equity capital infusion or Initial Public Offer

Compliance Requirements

  • Debenture holders should note the change in controlling shareholder and revised covenant structure
  • PG Lotus Pte. Ltd. must comply with maintaining minimum 26% shareholding threshold
  • PG Lotus Pte. Ltd. must maintain controlling stake and management control
  • Company must ensure constitutional documents are amended/modified as required
  • Continuing shareholders participating in capital infusion must comply with revised structure

Important Dates

  • 30th September 2024: Original Debenture Trust Deed date for ISIN INE00VD07016
  • 1st April 2025: Debenture Trust Deed date for ISIN INE00VD07032
  • 9th December 2025: Circular publication date

Impact Assessment

High Impact on Debenture Holders:

  • Material change in security structure with reduction in minimum shareholding covenant from 51% to 26%
  • Change in controlling shareholder from Indium IV to PG Lotus Pte. Ltd.
  • Exit of existing promoter/investor (Indium IV) and release from letter of comfort obligations
  • Potential dilution risk increased with lower minimum shareholding threshold

Positive Factors:

  • Significant capital infusion of up to Rs. 600 Crore provides financial strengthening
  • Maintenance of controlling stake requirement ensures stability of management control
  • PG Lotus Pte. Ltd. assumes controlling position with management responsibilities

Governance Changes:

  • Change in board composition
  • Amendment to constitutional documents
  • New management control structure under PG Lotus Pte. Ltd.

Risk Considerations:

  • Lower minimum shareholding threshold (26% vs. 51%) provides more flexibility for dilution
  • Debenture holders should assess creditworthiness and track record of new controlling entity
  • Changes in management and control may impact operational strategy and financial performance

Impact Justification

Significant change in debenture covenants involving reduction in minimum shareholding requirements from 51% to 26%, exit of existing major shareholder (Indium IV), and change in management control with capital infusion of up to Rs. 600 Crore by new investor PG Lotus Pte. Ltd. - materially impacts debt security holders' rights and company governance.