Macrotech Developers, formerly known as Lodha Group, has secured a three-year debt refinancing scheme worth Rs 650 crore from Standard Chartered (OTC:SCBFF) and Deutsche Bank (ETR:DBKGn). The move is part of the company's strategy to decrease its high-cost debt amid the launch of seven projects with a combined Gross Development Value (GDV) of Rs 14,300 crore this fiscal year.
The funding was split into 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. Conversely, Deutsche Bank's NCDs' interest rate is linked to a spread of 2.7% over the Reserve Bank of India's (RBI) 90-day treasury bills.
According to Sushil Kumar Modi, CFO of Macrotech, these NCDs are expected to reduce the overall interest cost by 5-10 basis points. Macrotech has been focused on reducing its overall debt and has successfully decreased its net debt from Rs 16,100 crore in March 2021 to Rs 6,730 crore in September 2023. This significant reduction was aided by increased sales bookings and collections.
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.
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