Tuesday, 24 May 2016


Pune’s Shubhi Agro Dairy defaults on secured non-convertible debentures

MUMBAI: Pune-based Shubhi Agro Dairy has defaulted on non-convertible debentures (NCD) worth Rs 50 crore it issued in March 2014, according to its investors, joining the fast-growing list of defaulting entities in the country.

Several investors that ET spoke to said the dairy firm has not paid interest since December 2014 and has also defaulted on a part payment of the principal amount.

Shubhi Agro's fully secure NCD were issued through Karvy Capital, with IL&FS "I had invested most of my retirement savings into this issue because the representatives of the debenture issuer (Karvy) told us that it was fully secure," said SD Siva, a 69-year-old retired advertising professional in Chennai, who has investedRs 50 lakh in the NCD. "But even after six months of default, no one is in a position to say when monies will be repaid to the debenture holders," he said.

An IL&FS official acknowledged the default and said it will proceed with a legal action.

An email sent to Shubhi Agro Dairy's official id bounced. Karvy confirmed that Shubhi Agro has delayed interest payment to investors. "The company is evidently in some stress due to global milk and milk-product prices," it said in an email response. "The trustees and Karvy as debenture holder representative are constantly in touch with the borrower company. We are helping the company in all possible ways to tide over the situation. We are confident that the company will clear all arrears soon,"  
 On Sunday, Karvy in an email communication to investors shared IL&FS' various legal options against the company. They included filing criminal proceedings for cheque bounce, winding up petition and invoking the security where the trustees will get custody of promoters' share.

Shubhi Agro Dairy, also known as Vaishno Devi Dairy Products Pvt Ltd, is promoted by Nandkishore Attal who was once profiled as a 'Young Turk' by a business news channel. The company had raised the money through NCDs for capex expansion and brand promotion, according to its prospectus. 

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