Gujarat Themis Biosyn Ltd. moves to reshape its capital structure

The board resolution does not disclose a specific end-use for the proposed Rs 585 Crores NCD proceeds. It only approves issuance of NCDs of up to Rs 585 Crores through private placement; the company states that details for each issuance will be disclosed at the time of allotment. ^[1]

Accordingly, the resolution does not confirm whether the funds will be used for capacity expansion (Capex) or for refinancing existing high-cost debt. The available Annexure also leaves key instrument terms, including tenure, coupon and security, to be disclosed later. ^[2]

Conclusion: At this stage, neither Capex funding nor high-cost debt refinancing can be treated as the formally disclosed purpose of the Rs 585 Crores issue.

Assuming the Rs 585 Cr NCD issue is incremental debt and equity remains unchanged, the standalone debt-to-equity ratio would rise from 0.56x to approximately 2.59x. That is an increase of about 2.03x, or 363%.

Leverage impact

The latest balance-sheet figures show total debt of Rs 159.86 Cr and total equity of Rs 287.76 Cr ^{[3] [4]}. The reported debt-to-equity ratio is 0.56x ^[5].

• Pro forma debt = Rs 159.86 Cr + Rs 585 Cr = Rs 744.86 Cr
• Pro forma debt-to-equity = Rs 744.86 Cr / Rs 287.76 Cr = 2.59x
• The calculation assumes the NCD proceeds do not immediately repay existing borrowings and that there is no offsetting equity issuance.

Interest coverage sensitivity

The latest reported standalone TTM EBIT was Rs 69.84 Cr and TTM finance cost was Rs 4.70 Cr ^{[6] [7]}, corresponding to a reported TTM interest coverage ratio of 14.86x ^[8].

No NCD coupon, credit rating, or comparable-market yield is reported, so an exact rate-based estimate cannot be established. Using the reported TTM EBIT as the numerator and assuming the NCD is outstanding for a full year:

At an illustrative 10% coupon, interest coverage would fall from 14.86x to approximately 1.10x. Even at 9%, it would decline to about 1.22x, indicating that the proposed borrowing would materially tighten interest-servicing headroom unless the funded assets generate substantial additional EBIT.

The sensitivity assumes full-year interest, no refinancing benefit, no capitalised interest, and no earnings contribution from the use of proceeds. If the NCD refinances existing debt or is issued part-way through the year, the first-year deterioration would be smaller.

No. The reported 10 September board outcome confirms approval to issue NCDs of up to Rs 585 Crores through private placement, but does not state whether they will be secured or unsecured, nor does it disclose the tenor or maturity schedule. Both terms remain undisclosed at this stage. ^[9]

Cash-flow context

• FY26 standalone operating cash flow was Rs 48.78 Crores, against capex of Rs 172.53 Crores; derived free cash flow was therefore approximately negative Rs 123.75 Crores. ^{[10] [11]}
• FY25 operating cash flow was Rs 91.03 Crores, against capex of Rs 116.15 Crores, implying derived free cash flow of approximately negative Rs 25.12 Crores. ^{[10] [11]}
• FY26 net cash flow was negative Rs 8.57 Crores. ^[12]

The proposed maximum issuance is therefore approximately 12.0x FY26 operating cash flow, derived from Rs 585 Crores divided by Rs 48.78 Crores. ^{[9] [10]}

Implication: tenor is a material missing term. A short-dated or bullet structure would create meaningful refinancing and repayment pressure relative to recent internally generated cash, while a longer tenor would spread repayment but increase cumulative interest obligations. The security ranking, coupon, amortisation schedule, and use of proceeds will be needed before assessing the debt burden properly.