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Muthoot Finance NCD offer review - Jan 2017

Posted on Monday, January 16, 2017

Muthoot Finance NCD offer review - Jan 2017

Muthoot Finance Ltd (MFL) – a frequent visitor to the debt market is once again bringing its NCD offer.

MFL is primarily a gold finance company has diversified its money transfer services, providing cash withdrawal through while label ATMs etc. To meet its business funding needs for onward lendingsand meeting general corpus fund needs, it is coming out with s a Tranche I of its 11th issue in last five years. The company is aiming to raise Rs, 1400 crore as a shelf limit with a secured NCD worth Rs. 1300 crore and unsecured NCD worth Rs. 100 crore. Issue opens for subscription on 17.01.17 and will close on or before 17.02.17. Under Tranche I the base size is Rs. 200 crore and green shoe option to retain further Rs. 1200 crore thus making a total issue of Rs. 1400 crore.

TheNCDs are having a face value of Rs. 1000 each and tenures of 400 days, 18 months, 24 months, 36 months and 60 months. It offers coupon rates ranging from 8.50 per cent to 9.25 per cent and interest payment options of Monthly, Annual and Cumulative, depending on the choice of investors and category. Minimum application is to be done for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD (i.e. Rs. 1000) thereon, thereafter. Issue is lead managed by Edelweiss Financial Services Ltd and AK Capital Services Ltd. IDBI Trusteeship Services Ltd is the Debenture Trustee and Link Intime India Pvt Ltd is the registrar to the offer. Post allotment, NCDs will be listed on BSE. CRISIL and ICRA both have rated this offer as AA/Stable indicating high degree of safety regarding timely servicing of financial obligations. Post issue, company’s debt-equity ratio will stand enhanced to 3.57 times from 3.32 times.

For last three fiscals, the company has shown setback for FY15 and its net NPAs have gone up from 1.57% to 2.46%. However, the company has loyal investors backing in southern region.

Conclusion: Considering its rating and the debt-equity ratio, investors looking for steady interest income may consider investment as its coupon rates are lucrative.

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About Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).

About Dilip Davda

Dilip Davda (SEBI registered Research Analyst-Mumbai), a freelance journalist for more than 25 years, is a stock market analyst and news article writer. Since 1985, he has contributed to print media, electronic media and often appears on TV channels as visiting stock analyst. His articles are regularly publishes in Smart Investment (English and Gujarati weekly published from Ahmedabad), Free Press Journal and many other news papers & magazines. He is also a visiting stock analyst on DD News TV Channel.


User Comment

2. Mahendra  Jan 23, 2017 8:17:02 PM IST Reply
Allotment kab hoga. Finding no information anywhere.
1. iRFAN  Jan 19, 2017 12:39:23 PM IST Reply
Khatam ho gaya bhaiyo ek hi din me 1500 crore!!!!!!!!!!!!
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