MuthootFinance NCD October 2020 is open for subscription from 27 Oct 2020 to 20 Nov 2020. the company is aiming to raise a massive amount of ₹ 2,000 Crores through this NCD Issue. in this post we will discuss and analyst the details about Muthoot Finance NCD October 2020.
Muthoot Finance Limited
Muthoot Finance Limited (MFL) is the flagship company of the Kerala-based business house, The Muthoot Group, which has diversified operations in financial services, healthcare, real estate, education, hospitality, power generation, and entertainment. MFL was incorporated in 1997 and is India’s largest gold loan focussed NBFC with total loan assets (standalone) of ₹ 41,296 crore and 4,573 branches as of June 30, 2020. The company derives a major proportion of its business from South India (48% of the total portfolio as of June 30, 2020), where gold loans have traditionally been accepted as a means of availing short-term credit, although MFL has increased its presence beyond South India over the past few years.
The company Incorporated in 1997, Muthoot Finance Ltd offers business loans secured by gold jewelry (gold loans) to meet unanticipated or other short-term liquidity requirements. Muthoot Finance India’s largest gold financing company in terms of the loan portfolio. The company primarily caters to individuals who possess gold jewelry but cannot access formal credit within a reasonable time, or for whom credit may not be available at all. The company served over 70 crore customers till Oct 2020 (including repeat customers) and serving over 2.5 Lakh customers daily.
MFL achieved a standalone net profit of ₹ 3,018 crores on an asset base of Rs. 50,460 crore in FY2020 against a net profit of ₹ 1,972 crores on an asset base of ₹ 38,069 crores in FY2019. In Q1FY21, the company witnessed a standalone net profit of ₹ 841 crores. The consolidated portfolio stood at ₹ 46,501 crores as of June 30, 2020, compared to ₹ 46,871 crores as on March 31, 2020 (₹ 40,228 crores as on March 31, 2019), of which gold, housing, and microfinance accounted for 87%, 4%, and 6%, respectively.
Objectives of the Issue
- For the purpose of lending- minimum of 75% of the amount raised and allotted in the Issue.
- For General Corporate Purposes- shall not exceed 25% of the amount raised and allotted in the Issue.
Muthoot Finance NCD Oct 2020 Details
| Issue Open | 27 Oct 2020 |
| Issue Closing | 20 Nov 2020 |
| Security Name | Muthoot Finance Ltd |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Base Issue Size | ₹ 100.00 Crores |
| Issue Size (Shelf) | ₹ 1,900.00 Crores |
| Total Issue size | ₹ 2,000 Crores |
| Issue Price | ₹ 1000 per NCD |
| Face Value | ₹ 1000 for each NCD |
| Minimum Lot size | 10 NCD |
| Market Lot | 1 NCD |
| Coupon Rate Upto | 8.00% p.a |
| Credit Rating | AA (Stable) – ICRA AA/Positive – CRISIL |
| Tenor | 38 months and 60 months |
| Payment Frequency | Monthly, Annual, or Cumulative |
| Basis of Allotment | First Come First Serve Basis |
| Listing At | BSE |
NCD Allocation Ratio by category
| Category | Ratio |
| Category 1 – QIB | 10% |
| Category 2 – NII | 10% |
| Category 3 – HNI | 40% |
| Category 4 – RII | 40% |
NCD’s Offered by category
| Category | NCD’s Reserved |
| Category 1 – QIB | 100,000 |
| Category 2 – NII | 100,000 |
| Category 3 – HNI | 400,000 |
| Category 4 – RII | 400,000 |
| Total NCD’s | 1,000,000 |
NCD Terms of Each Instrument
| Option/Series | I | II | III | IV | V | VI |
| Tenor | 38 months | 60 Months | 38 months | 60 Months | 38 months | 60 Months |
| Interest Frequency | Monthly | Monthly | Annual | Annual | Cumulative | Cumulative |
| Coupon Rate (% p.a.) Cat I, II | 7.15% | 7.50% | 7.40% | 7.75% | NA | NA |
| Coupon Rate (% p.a.) Cat III, IV | 7.40% | 7.75% | 7.65% | 8.00% | NA | NA |
| Effective Yield (% p.a.) Cat I, II | 7.15% | 7.50% | 7.40% | 7.75% | 7.40% | 7.75% |
| Effective Yield (% p.a.) Cat III, IV | 7.40% | 7.75% | 7.65% | 8.00% | 7.65% | 8.00% |
| Amount(₹/NCD) on Maturity – Cat I, II | ₹1,000 | ₹1000 | ₹1,000 | ₹1,000 | ₹1,254.11 | ₹1,452.40 |
| Amount(₹/NCD) on Maturity – Cat III, IV | ₹1,000 | ₹1,000 | ₹1000 | ₹1,000 | ₹1,263.41 | ₹1,469.33 |
NCD Rating Details
ICRA has assigned “[ICRA]AA” (pronounced ICRA double A) rating with a Stable outlook, assigned to the captioned Non-Convertible Debenture Programme of your company, and last communicated to you vide our letter dated September 15, 2020, and September 25, 2020 stands. Instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. Within this category rating modifier {“+” (plus) or “-” (minus)} can be used with the rating symbols. The modifier reflects the comparative standing within the category.
CRISIL has assigned its ‘CRISIL PP-MLD AAR/Positive’ rating to Rs.350 crore Proposed Issuance of Long Term Principal Market Linked Debentures of Muthoot Finance Limited (Muthoot Finance). The ratings on existing debt instruments have been at ‘CRISIL AA/CRISIL PP-MLD AAR/Positive/CRISIL A1+’.
Muthoot Finance NCD Oct 2020 Lead Managers
- A K Capital services Ltd
- Equirus Capital Pvt Ltd
- Edelweiss Financial services Ltd
- JM Financial Consultants Pvt Ltd
Muthoot Finance NCD Trustee
IDBI Trusteeship Services Limited
Muthoot Finance NCD Oct 2020 Registrar
Link Intime India Private Ltd
C 101, 247 Park, L.B.S.Marg,
Vikhroli (West), Mumbai – 400083
Phone: +91-22-4918 6270
Email: mfl.ncd2020@linkintime.co.in
Website: http://www.linkintime.co.in
Company Contact Information
Muthoot Finance Ltd
2nd Floor, Muthoot Chambers,
Opp Saritha Theatre Complex,
Banerji Road, Kochi 682 018, India
Phone: (+91 484) 239 4712
Email: ncd@muthootgroup.com
Website: https://www.muthootfinance.com/
Final Thoughts
Non Convertible Debentures (NCD) is a better investing option for those who are looking for a diversified portfolio. investing in Muthoot Finance NCD October 2020 is purely your personal choice. make a good study and analysis before you make the investment.
Happy Investing.
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