Centrum Capital is planning to raise funds aggregating up to ₹ 1,500 crore, possibly to fund the proposed small finance bank venture of its step-down subsidiary, even it reported a consolidated net loss of ₹ 5.54 crore in the fourth quarter ended March 31, 2021 against a consolidated net profit of ₹25.05 crore in the year ago period. .

The fund raising in the backdrop of Centrum Financial Services Ltd (CFSL) getting ‘in-principle’ approval from the Reserve Bank of India to set up a small finance bank, which in turn is expected to takeover the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank.

NCD issue

Specifically, the board of directors of Centrum Capital on Tuesday approved an enabling resolution for raising funds through the issuance of non-convertible debentures, up to ₹1,000 crores, subject to the approval of shareholders.

Further, the board also approved an enabling resolution for raising of funds through issue of equity shares through qualified institutional placements up to ₹ 500 crore subject to approval of the shareholders/ regulatory and/or statutory authorities as applicable.

Jaspal Bindra, Executive Chairman, Centrum Group, last week said that CFSL and BharatPe will commit ₹900 crore to the SFB in the first year. As and when required, the partners will commit ₹900 crore more. CFSL and BharatPe will be equal partners in the proposed SFB.

The minimum paid-up net worth requirement for starting an SFB is only ₹200 crore. Once CFSL takes over PMC Bank, it would get a ready-made branch network of about 100 branches in Mumbai and in a few States.

In FY21, Centrum Capital reported a consolidated net loss of ₹41.8 crore against a net profit of ₹71.57 lakh in FY20.

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