Macrotech Developers Secures Rs 650 Crore in Debt Refinancing Scheme
Introduction
Macrotech Developers, formerly known as Lodha Group, has successfully secured a three-year debt refinancing scheme worth Rs 650 crore from Standard Chartered and Deutsche Bank. This strategic move aims to reduce the company’s high-cost debt and comes amidst the launch of seven projects with a combined Gross Development Value (GDV) of Rs 14,300 crore in the current fiscal year.
Secured and Unsecured NCDs
The funding has been divided into two categories: secured Non-Convertible Debentures (NCDs) worth Rs 245 crore from Standard Chartered and unsecured NCDs worth Rs 405 crore from Deutsche Bank. Standard Chartered’s NCDs carry an additional charge of 50 basis points per Lodha rating downgrade, while Deutsche Bank’s NCDs have an interest rate linked to a spread of 2.7% over the Reserve Bank of India’s (RBI) 90-day treasury bills.
Reducing Interest Costs
Sushil Kumar Modi, CFO of Macrotech, expects these NCDs to reduce the overall interest cost by 5-10 basis points. The company has been focused on reducing its net debt, successfully bringing it down from Rs 16,100 crore in March 2021 to Rs 6,730 crore in September 2023. This significant reduction has been achieved through increased sales bookings and collections.
CRISIL A+ Rating and Future Plans
Macrotech currently holds a CRISIL A+ rating and has a ready-to-move-in inventory worth Rs 6,560 crore. As part of its ongoing strategy, the company aims to further reduce its gross debt to Rs 8,000 crore in fiscal 2024.
This article offers a comprehensive overview of Macrotech Developers’ recent debt refinancing scheme and its plans to decrease high-cost debt. The company’s focus on reducing debt and its successful track record in doing so demonstrate its commitment to financial stability and growth. With the launch of multiple projects, Macrotech Developers is poised for further success in the real estate industry.
