About Beacon Trusteeship Limited

BEACON TRUSTEESHIP LIMITED, a SEBI registered Debenture Trustee vide Registration No. IND000000569, which provides wide range of trusteeship service across various sectors such as Debenture Trustee Services, Security Trustee Services, Trustee to Alternate Investment Fund (AIF), Trustee to ESOP, Securitization Trustee, Bond Trusteeship Services, Escrow Services, Safe keeping and other allied services.

Company provides trusteeship services by acting as intermediary between the issuer company or entity and investors. Company as a Debenture Trustee plays a pivotal role in Scope of work under trusteeship services includes Due diligence, Custodial services, Monitoring compliance, Documentation, Disclosures, Record keeping etc.

With the help of a technology, a dedicated legal and compliance team for each of products viz. Debenture Trusteeship, Security Trustee for Loans, Alternative Investment Funds, Securitization and Escrow, they execute transactions as per clients’ needs.

Locational presence in more than 15 cities in India including major cities such as Mumbai, Delhi, Chennai, Hyderabad, Jaipur, Bangalore, Chandigarh, Indore, Kolkata, Lucknow and Gandhinagar whether through regional offices or signatories.

Debenture Trustee, company enters into a formal agreement with the Issuer company who is desired to issue Debentures of any type including Non-Convertible Debentures. They conduct Due-diligence and periodic monitoring, ensure compliance with SEBI, SEBI LODR Regulations and relevant applicable circulars and guidelines.

Trustee to AIF, company enters into formal agreement with “Settlor” who desires to set up the AIF and appoints Company as trustee under the same agreement. Duties include Appointment of Investment Manager, holding trust fund for the benefit of the Beneficiaries, make application to SEBI for the granting of certificate of registration, maintain books of accounts, maintain confidentiality as regard to the Investments and such other matters as per the respective agreements.

As Securitization Trustee, Company settles trust for the purpose of securitization. The seller assigns such receivables in accordance with agreement to the Settled trust and monitors periodic collections arising out of such receivables. Duties includes sharing of timely statements to investors, ensure timely investor pay-outs, ensuring Investments of trust property is in accordance with the agreement, segregation of assets and ensuring all transactions are properly entered in accordance with the agreement.

Escrow and Monitoring agent, whereby the client appoints them as the monitoring agent to ensure outward remittance from the Escrow Account are credited only to the Special Purpose Collection Account or any other account as specified in the formal agreement. This includes Drafting & Vetting of Escrow Agreement, Set up of Escrow Mechanism, Documentation and timely monitoring services.

Industry

The Indian debt market is fairly large, with the bond market presently sized at around $2.34 trillion. Of this, $1.83 trillion is dedicated to government bonds, while $510 billion is allocated to corporate bonds (as of Mar-22, Source: CCIL, SEBI). Government bonds constitute 78% of the overall outstanding bonds in the country, while corporate bonds account for 22% of the market. Over the past five years, starting from March 2018, the total outstanding bonds have witnessed a remarkable growth of 77%, with government bonds experiencing an 85% rise and corporate bonds increasing by 53%.

The outstanding market size is growing at a CAGR of 12.6% FROM FY18 – 23. With the growing importance of investment for higher GDP growth, there is an urgent need for alternative sources of financing; and the corporate bonds market can play an important role here. A well- developed and smooth functioning corporate bonds market serves as an important driver of economic growth as it provides an additional source of long-term finance for industry.

In fact, ideally there should be matching of long-term projects with long term finance and the bond market offers an avenue for the same. In India, RBI and SEBI have taken various steps to develop and strengthen the corporate bonds market. However, while the size of the corporate debt market has expanded, it still remains relatively underdeveloped relative to the bank credit segment.

Risk associated to the business:

• The company is subject to SEBI governed regulatory body and other government agencies. Changes in regulations could impact on the business model of the company and increase costs.
• The trustee industry in India is becoming increasingly competitive. Trustee companies face competition from both established players and new entrants. Increased competition could put downward pressure on fees and margins.
• The company relies on a team of experienced professionals to provide debenture trustee services. The loss of any key personnel could have a negative impact on the company's business. There is no such key personnel responsible for the same.
• The company is dependent on Debenture trustee fees for a substantial share of its revenue and profitability. Any reduction in Debenture trusteeship fees could have a material adverse effect.
• The Company is dependent on a small number of customers, sales from top 10 customers contribute 44.39%, 41.99%, and 34.38% for total revenue from operations for the year ended March 31, 2024, 2023 and 2022 respectively). Loss of any of these large customers may affect revenues and profitability.