Description

Revision of covenant terms for debentures (ISINs INE00VD07016 and INE00VD07032) including changes in shareholding requirements, capital structure, and management control following stake transition from Indium IV to PG Lotus Pte. Ltd.

Summary

BSE has issued an update regarding debt securities of Infinity Fincorp Solutions Private Limited. The circular announces significant revisions to debenture covenants under Clause 9.8(a) of the Debenture Trust Deed for two ISINs (INE00VD07016 dated September 30, 2024, and INE00VD07032 dated April 1, 2025). The changes involve a transition of controlling stake from Indium IV (Mauritius) Private Limited to PG Lotus Pte. Ltd, reduction in minimum shareholding requirements, and substantial capital infusion.

Key Points

  • Covenant revisions apply to ISINs INE00VD07016 and INE00VD07032
  • Minimum unencumbered equity shareholding requirement reduced from 51% to 26%
  • Controlling shareholder changing from Indium IV (Mauritius) Private Limited to PG Lotus Pte. Ltd (together with its affiliates and funds)
  • PG Lotus Pte. Ltd to maintain controlling stake and management control
  • Capital infusion of up to Rs. 600 Crore by PG Lotus Pte. Ltd and continuing shareholders
  • Indium’s shareholding to fall below 51%, leading to exit and release from letter of comfort obligations
  • Changes in board composition and management/control structure
  • Amendments to constitutional documents

Regulatory Changes

Revised Covenant Terms

Previous Covenant: Indium IV (Mauritius) Private Limited was required to:

  • Hold minimum 51% unencumbered equity share capital (except changes due to primary equity capital infusion)
  • Maintain holdings on fully diluted basis
  • Have management control of the Issuer

Revised Covenant: PG Lotus Pte. Ltd (together with its affiliates and funds managed by it) shall:

  1. Maintain controlling stake in the Issuer and have management control
  2. Hold minimum 26% unencumbered equity share capital (except changes due to primary equity capital infusion/Initial Public Offer) on a fully diluted basis

Compliance Requirements

  • Debenture holders should note the revised covenant terms affecting their securities
  • Trustees must monitor compliance with new shareholding and control requirements
  • The company must maintain PG Lotus’s minimum 26% stake and controlling position
  • Constitutional document amendments to be implemented
  • New management and board structure to be established

Important Dates

  • Original Debenture Trust Deed for ISIN INE00VD07016: September 30, 2024
  • Debenture Trust Deed for ISIN INE00VD07032: April 1, 2025
  • Circular Date: December 9, 2025

Impact Assessment

High Impact on Debenture Holders:

The revision represents a material change in the security structure and risk profile:

  1. Reduced Minimum Holding: The decrease from 51% to 26% minimum shareholding requirement significantly reduces the margin of safety for maintaining controlling stakeholder commitment

  2. Change in Sponsor: Transition from Indium IV to PG Lotus Pte. Ltd represents a complete change in the sponsor group, affecting the comfort level and recourse available to debenture holders

  3. Capital Structure Changes: Rs. 600 Crore capital infusion may dilute existing shareholders and alter the company’s leverage profile

  4. Release of Comfort Letter: Exit of Indium and release from its letter of comfort obligations removes a layer of security previously available to creditors

  5. Management Changes: Changes in directors and management control may affect operational continuity and strategic direction

  6. Flexibility for IPO: The revised covenant allows for shareholding changes due to Initial Public Offer, indicating potential listing plans that could further alter the capital structure

Debenture holders should carefully evaluate these changes in the context of their risk appetite and consider seeking legal counsel regarding their rights under the revised covenant structure.

Impact Justification

Material covenant changes affecting debenture holders including reduction of minimum shareholding requirement from 51% to 26%, change in controlling shareholder from Indium IV to PG Lotus, and Rs. 600 crore capital infusion impacting security structure