: L&T Finance Allots ₹800 Crore NCDs at 8.57% Coupon, Maturing in October 2036

Key Takeaways:

• L&T Finance allotted 80,000 non-convertible debentures worth ₹800 crore through a private placement on October 12, 2026. 
• The subordinated, unsecured debentures carry an annual coupon of 8.57% and are scheduled to mature on October 10, 2036. 
• The issue had a base size of ₹500 crore and a greenshoe option of up to ₹1,000 crore, allowing a maximum issue size of ₹1,500 crore. 

L&T Finance Limited has completed the allotment of ₹800 crore worth of non-convertible debentures (NCDs) through a private placement, according to a stock exchange filing dated October 12, 2026. 

The finance company allotted 80,000 debentures with a face value of ₹1 lakh each to identified investors. The securities carry a fixed annual coupon of 8.57% and have a maturity date of October 10, 2036. 

The NCDs are subordinated, unsecured, rated and redeemable. L&T Finance has proposed their listing on the Negotiated Trade Reporting Platform (NTRP) under the New Debt Market of NSE. 

L&T Finance Raises ₹800 Crore Against ₹500 Crore Base Issue 

The original base issue comprised 50,000 debentures with a combined nominal value of ₹500 crore. 

L&T Finance also provided for a greenshoe option, allowing the company to retain oversubscription of up to ₹1,000 crore. This took the maximum permissible issue size to ₹1,500 crore. 

The final allotment of ₹800 crore was ₹300 crore above the base issue size and represented 53.33% of the maximum issue amount. 

The company allotted the securities in dematerialised form for cash on October 12, 2026. 

Unlike a public NCD offering, a private placement involves issuing securities to identified investors under the applicable regulatory framework. 

The allotment was made under the company's General Information Document dated March 13, 2026, and Key Information Document dated October 7, 2026. 

NCDs Carry 8.57% Annual Interest and 10-Year Tenor 

The debentures have an original tenor of 3,651 days, with principal repayment scheduled for October 10, 2036. 

Interest will be paid annually at a coupon rate of 8.57%. 

The first coupon payment is due on October 12, 2027. Subsequent payments are scheduled annually, with the final coupon and principal redemption falling due on October 10, 2036. 

For each debenture with a face value of ₹1 lakh, the regular annual coupon amount is ₹8,570. The final coupon amount is ₹8,523.1694 before rounding, reflecting the shorter final interest period of 364 days. 

Interest payments are subject to rounding to the nearest rupee. 

Certain payment dates falling on non-business days are adjusted according to the business-day convention specified in the issue documentation. 

What Does Subordinated and Unsecured Mean? 

The classification of the debentures is an important feature of the L&T Finance NCD allotment. 

An unsecured debenture is not backed by a specific charge over the issuer's assets. In this case, the filing confirms that no security charge has been created for the instrument. 

Subordination concerns the order in which creditors are paid if an issuer enters a liquidation or similar process. Subordinated debt generally ranks below senior debt in the repayment hierarchy, subject to the instrument's contractual terms and applicable law. 

The securities are also non-convertible, meaning they do not provide a contractual right to convert the debt into equity shares. 

These features distinguish the instruments from secured debt or convertible securities. 

The filing describes the debentures as rated but does not disclose their specific credit rating in the allotment annexure. 

Payment Terms and Default Provisions 

L&T Finance has specified an additional interest obligation in the event of a payment default. 

If the company fails to pay the scheduled coupon or principal on the applicable due date, additional interest of 2% per annum above the coupon rate will be payable for the defaulting period. 

This would take the contractual interest rate applicable during such a default period to 10.57% per annum. 

The provision does not mean that a default has occurred. It forms part of the issue's stated payment terms. 

The principal repayment is fixed at ₹1 lakh per debenture on maturity. 

At the aggregate issue level, the total nominal principal due for redemption is ₹800 crore. 

The company has not reported any payment default in connection with this allotment. 

L&T Finance Debt Issue and NSE Listing 

The proposed NSE listing provides a formal market framework for reporting and trading the debentures, subject to the applicable listing process. 

The filing confirms the proposed listing venue but does not state that secondary-market trading has already commenced. 

The company disclosed the transaction under the SEBI Listing Obligations and Disclosure Requirements Regulations and the regulations governing the issue and listing of non-convertible securities. 

The October 12 allotment adds ₹800 crore of long-tenor subordinated debt to L&T Finance's funding arrangements, with annual coupon obligations extending through October 2036. 

The issuance does not involve the allotment of equity shares or a change in the company's equity share capital.