Muthoot Finance To Raise Rs 700 Cr Through Secured NCDs
Muthoot Finance, a gold loan provider and upper-tier NBFC, has unveiled its latest public issue of secured redeemable non-convertible debentures (NCDs) with a face value of Rs 1,000 each. The issue comprises a base size of Rs 100 crore and provides the option to retain over-subscriptions up to Rs 600 crore, making it a total tranche limit of Rs 700 crore.
This NCD issue commenced on 21 September 2023, and is scheduled to close on 6 October 2023. The closing date may be adjusted as determined by the board of directors or the NCD committee.
ICRA has assigned a rating of AA plus (stable) to the secured NCDs proposed in this issue, signifying a high level of safety regarding timely financial obligation servicing, as per a company statement. The NCDs are intended to be listed on the BSE.
The allotment will be carried out on a first-come, first-served basis. There are seven investment options available for secured NCDs, featuring 'monthly' or 'annual' interest payment frequencies or 'on maturity redemption' payments, with interest rates ranging from 8.75 per cent per annum to 9 per cent per annum for individual and corporate investors.
George Alexander Muthoot, MD of Muthoot Finance, commented, "Our 32nd NCD issue is open for subscription, and the interest rate offered on NCDs has been increased by 0.50 per cent. Compared to other available investment avenues, our NCDs, rated AA plus/stable, offer an attractive investment option. This provides our investors a dual advantage of a higher rating and attractive interest rates ranging from 8.75 per cent to 9 per cent per annum."
The funds raised through this issue will primarily be used for the company's lending activities. AK Capital Services is the lead manager for the issue, and IDBI Trusteeship Services serves as the debenture trustee. Link Intime India has been appointed as the registrar to the issue.
Muthoot Finance aims to provide a 1 per cent p.a. higher interest rate to retail individual investors compared to the rate applicable to institutions and corporates. The company anticipates increased market interest and investor participation in this offering.
In Q1 FY24, Muthoot Finance reported a 27 per cent increase in its consolidated profit after tax (PAT) to Rs 1,045 crore, driven by strong growth in loan assets. The company's total consolidated income stood at Rs 3,508 crore, marking a 25 per cent growth compared to the same quarter last year. The gold loan assets under management (AUM) surged by 18 per cent YoY and 7 per cent QoQ, reaching Rs 66,039 crore in Q1 FY24.
