Muthoot Finance to raise up to Rs 1,400 crore via NCDs

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NEW DELHI: Muthoot FinanceBSE 1.61 % plans to raise up to Rs 1,400 crore through a public issue of NCDs, the subscription for which opens tomorrow.

The non-convertible debentures (NCDs) will have face value of Rs 1,000 each, aggregating to Rs 1,300 crore, and unsecured NCDs of Rs 1,000 each aggregating to Rs 100 crore, totalling up to Rs 1,400 crore, the Kochi-based gold finance company said in a release.

“The tranche issue is with a base issue size of Rs 200 crore with an option to retain over-subscription up to shelf limit of Rs 1,400 crore,” it said.

Muthoot Finance said it will utilise the funds raised through this issue to lending activities of the company.

The company will offer 10 investment options for secured NCDs with monthly or annual interest payment or on maturity with effective yield ranging from 8.25 to 9.25 per cent for retail investors.

The investment option for unsecured NCDs is a scheme which doubles the invested amount in 96 months with an effective yield per annum of 9.06 per cent for retail investors.
The issue is rated by CRISILBSE 0.49 % and ICRABSE -1.16 % and both agencies have awarded long term debt rating of ‘AA/Stable’ for the debentures offered under the issue, the company said.

“This is the first public issue by the company after rating upgrade by CRISIL and ICRA… Given current liquidity condition and low interest rates on bank deposits, the rate of interest offered in current issue will be an attractive investment option for retail investors,” said George Alexander Muthoot, the company’s Managing Director.

He said the company has allocated 70 per cent of the issue for retail investors.

The issue opens on January 17 and closes on February 17 with an option to close earlier and/or extend, the company said.

Muthoot Finance stock closed at Rs 302.50, up 1.61 per cent, on BSE.