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MYRE Capital intends to raise Rs 20 crore through a structured debt opportunity that provides qualified investors with senior secured debt that is secured with a loan against property (LAP) via offline distribution channels. The required minimum investment for this offer is Rs 15 lakh with an IRR of 11%. The investment is a four-year structured instrument with monthly interest payments and annual principal repayments of 25%. A SEBI registered debenture trustee will oversee this transaction in its entirety, the company stated.
Businesses, corporations and other organisations can raise non-dilutive financing through the use of structured debt which also enables investors to take part in secured high yield opportunities. The invested capital would be given to a "financial institution" that lends money against property to retail investors in semi-rural and rural areas of South India.
In an interview captured by ET Realty, Aryaman Vir, the company’s founder and CEO said, "With the debut of our loan vertical last year, we have witnessed substantial interest from investors in financing opportunities backed by real estate assets. The investment product, which offers an internal rate of return (IRR) of 11%, is protected by strong collateral worth more than 1.5 times the amount of receivables.”
“We are levying annual fees of 1% for this approach to ensure that the entire loan book is very diverse. In order to increase the security of the raised capital we are only taking mature loans from the financial institution's current loan book that have been in existence for at least one year. This increases the security of the raised capital because no new loans are being made with it. We also have the choice of replacing a poor loan every month. The loan will be disbursed by the financial institution at an effective interest rate of about 19%. It offers them a better option by paying us monthly interest and principal at the end of the year,” stated Vir.
The Securities and Exchange Board of India's (SEBI) online bond platform (OBPs) measures are being requested by Myre Capital. This framework was developed by SEBI in November 2022 for online bond platform providers (OBPP) to maintain checks and balances on their operations. Companies would be required to apply for OBPP register as stockbrokers in the debt segment and guarantee that all disclosure and compliance criteria were met.
The business introduced structured debt opportunities in November 2022, including high-yield lease contract discounting which was backed by physical collateral and lease rental receivables from prestigious tenants in Hyderabad's Gachibowli district. Skootr Global is the property's operator and it hoped to raise Rs 19.15 crore through this chance. The target IRR for this opportunity was 13% with a minimum investment requirement of Rs 15 lakh.
The term of the investments is kept below the lock-in period for the subtenants under the lease rental discounting (LRD) model to ensure the investors' returns. The monthly rent is collected in an escrow account with the investors receiving the first distribution.
"We are now updating our LRD model to comply with SEBI's new framework. We also hope to reach the Rs 350 crore mark for the structured debt vertical by the end of the calendar year 2023. We expect to reach a total asset under management (AUM) of Rs 1,000 crore this year including fractional ownership,” stated Vir.
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