Muthoot Finance NCD Details
Muthoot Finance
Limited, a flagship company of the Muthoot group, is primarily into the gold
financing business which constitutes 99% of its total advances. It is also the
largest gold loan company in India.
Muthoot started its lending business in 2001 after getting RBI’s
registration to function as an NBFC and currently it has a network of 3,780
branches all over India. The company till date has no major plans to diversify
its business from gold loans to any other streams of financing. This issue will
be the fourth issue from this company in just over one year’s time. Muthoot
collected Rs. 1,413 crore through its previous three issues – Rs. 693 crore
from Series I, Rs. 460 crore from Series II and Rs. 260 crore from Series III.
The size of this NCD issue is Rs. 500 crore including a green-shoe option of
Rs. 250 crore.
Muthoot reported revenues
of Rs. 4,549 crore in FY12 as against Rs.2,316 crore in FY11, a jump of almost
96%. Net profit of the company increased by a massive 81% from 494 crore in
FY11 to 892 crore in FY12. Gross NPAs
and Net NPAs of the company stood at 0.56% and 0.57% respectively as on March
31, 2012 as against 0.29% and 0.33% respectively as on March 31, 2011.
Again, NRIs and
foreign nationals among others are not eligible to invest in this issue. The
allotment will be made on a “first-come-first-served” basis. These bonds will
also list on both the stock exchanges – NSE and BSE. Investors will have the
option to apply these bonds in physical form also except the “Option V” bonds
which are available only in the demat mode. The detail as given below
Issue of Muthoot Finance Secured Non-Convertible Debentures
(NCDs)
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Options
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Particulars
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Issuer
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Muthoot Finance Limited
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Issue period
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17 September 2012 To 5 October
2012
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Issue Size
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Rs 500 Crores (Public issue of Rs
250 Crores with an option to retain over-subscription of Rs 250 Crores)
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Basis of allocation
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First come first serve basis
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Listing
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Proposed to be listed on BSE and
NSE
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Rating
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ICRA AA-/Stable and CRISIL
AA-/Stable
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Face Value and Issue Price
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Rs 1,000 per NCD (Trading Lot - 1
NCD and in multiples of 1 NCD)
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Minimum Application
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Rs 10,000 (10 NCDs) and in
multiples of 1 NCD thereafter
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Interest Payment Date
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Annual Frequency - on 1st day
after 31 March and Monthly Frequency - 1st day of next month.
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Trading and Issuance
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Both physical and dematerialised
form (NCDs under Option V will be compulsorily allotted in dematerialised
form.)
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Interest Payable
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Interest on application 11.50% p.a
and Interest on refund 6.00% p.a. (Refer Terms and Conditions)
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Who can apply: Institutional, Non Institutional, Indian Nationals
Resident in India and HUF
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Investor Category
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I (Institutional)
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II (Non Institutional and HNl)
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III (Retail)
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Issue allocation %
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15%
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35%
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50%
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Specific terms for each series of Bonds:
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Series
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I
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II
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III
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IV
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V
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Frequency of Interest Payment
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Annual
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Annual
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Monthly
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Annual
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Cumulative
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Tenor (In months)
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24
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36
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60
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60
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72
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Coupon Rate (%) p.a
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11.50%
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11.75%
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11.75%
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12.00%
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NA
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Effective Yield (%) p.a
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11.50%
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11.75%
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11.75%
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12.00%
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12.25%
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Redemption Amount per NCD
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Face value + interest
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Rs. 2,000
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View on this issue:
As the Reserve Bank of
India (RBI) has become stricter with the gold financing norms. Competition from
the banks and other gold financing companies has also increased. It is the most
unattractive issue of this financial year.
Regards,
Arvind Trivedi
Certified Financial Planner
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