Came across Lucina Land Development’s NCDs recently. The coupon is pretty high 13.5% on the Jan 2029 paper, and the structure involves project-level security plus group guarantees, so thought it makes sense to start a thread and break this down together.
About the company
Lucina Land Development is a real estate developer within the Embassy group structure. It’s fully owned by Embassy Developments. The key project sitting under Lucina seems to be the Indiabulls Greens & Park project in Panvel. The company itself is more of a project SPV, but the NCDs are backed not just by the project but also by guarantees from Embassy Developments and a few group entities involved in the project ecosystem.
High-level details of the NCD
Instead of pasting the term sheet word-for-word, here’s the gist of what’s relevant:
-
Coupon is 13.5% per year
-
Maturity is in Jan 2029
-
Monthly interest payout
-
Issue size already placed around ₹110 crore, with a bigger programme of up to ₹950 crore
-
Secured by project cashflows and has an escrow + DSRA + ISRA setup
-
There are formal covenants around DSCR, security cover and sweep mechanisms
-
Infomerics has rated it A- (CE) with the credit enhancement coming from the group guarantees
Why it looks interesting
The 13.5% coupon obviously jumps out. It’s far higher than plain corporate NCDs in the AA/AAA space. This one isn’t an unsecured debenture — it has security over project receivables, escrow controls, and the guarantee from Embassy Developments and other group companies.
The documents have a fairly detailed waterfall system for cashflows, and the DSRA/ISRA requirements mean there should be some buffer if collections slow down temporarily.
But also, some things to be careful about
Despite the guarantee, you’re still ultimately exposed to real estate cashflows. Sales need to come in, construction must stay on schedule, and customer collections must keep flowing. If the project slows down, even a strong covenant package can get tested.
The guarantor’s financials aren’t spotless. Embassy Developments, on a standalone basis, has had weak operating numbers. That doesn’t make the guarantee useless, but it does mean you shouldn’t assume it’s the same as a AAA parent guarantee.
The whole programme size is large, and if more tranches get raised, it does increase reliance on timely sales in the Panvel project. Also, while the structure is tight, there’s always the practical aspect: real estate escrows and DSCR tests can get complicated in stress.
Disc: Not invested. Still evaluating.