Project Alpha

About opportunity

What Are Private Placed Secured NCD’s? Non Convertible Debentures (NCDs) are debt financial instruments companies issue to raise money from investors through private placement offers. The secured NCD is backed by the issuing company’s assets and obligated to fulfill its debt repayment. This makes secured NCDs one of the safest choices.

KEY FEATURES: Investment opportunity Project Alpha offers secured Non-Convertible Debentures (NCDs) backed by two strategically positioned commercial projects in Pune. These projects are situated at prime city-centric locations, presenting a lucrative investment proposition. The debentures are secured against the portfolio of these two projects. Projections indicate that future pre-tax cash flows offer a substantial 3.4 times cover on the total facility size, underlining the strength of the investment. RISK & MITIGANTS is subdivided in 5 parts, done with proper regulatory compliance & due diligence

1. Company has all material entitlements and approvals required for Project 1 in-place including RERA registration, with part OC received for LG + UG + 1st commercial floor.

2. Further, lead debenture holder (Maxim Capital Advisors LLP) undertook technical diligence with respect to both the Projects through an independent and reputed technical expert before proceeding ahead with its investment.

3. All project inflows will be deposited in a debenture trustee-controlled HDFC escrow account.

4. No NOC is granted below a minimum sale price documented in the debenture documents, thereby checking any cash leakage.

5. All releases from the escrow account for project expenses is controlled and reviewed by the project monitor and/or escrow monitor.

APPLICABLE TAXES: Income tax as per jurisdiction will be applicable.

TDS REFUND & TDS DEDUCTION: Yes, can get TDS refunded, provided IT returns are filed promptly with government income for the year is below the prescribed non-taxable amount.

FAQ

Is the 14.8% return fixed or variable?

• The interest rate on the underlying Debentures is 13.85% per annum compounded monthly and payable quarterly on the outstanding face value of the Debentures. This results in a 14.8% IRR for the investors.

• In case of prepayment of the principal from refinance of the facility or project cash flows (due to project outperformance), investor return (IRR) will remain the same, however, absolute profit amount and multiple will be lower.

What instrument/security will I get for making this investment?

• Investors will purchase secured, unlisted, unrated, non-convertible debentures (Debentures) issued by the borrower.

• These Debentures will be in demat form and credited to the investor’s demat account. Who is the borrower?

• Borrower is Mittal Brothers group, a prominent Pune-based group interested in residential and commercial projects.

• Promoted by 2 brothers with 25+ years of experience in real estate development in and around the Pune region.

• Group has a track record of completing 26 projects (~65+ lac sf) to date across residential and commercial asset classes.

Are the Debentures secured?

Yes, the Debentures are secured. The debenture trustee will hold the following security for the benefit of all investors:

• The facility size is INR 130 Cr initially, but limited to INR 80 Cr with a primary charge over Project 1 assets. Once a similar charge is placed on Project 2, an additional INR 50 Cr will be disbursed.

• Other security measures include personal guarantees from promoters, a 100% equity share pledge, and primary charges over partnership interests and project bank accounts.

• Undated cheques are provided for payments, and a Shortfall Undertaking is in place.

• These security measures are specifically designated for these debentures.