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Muthoot Finance NCD Offer review Dec 2015

Published on Saturday, December 12, 2015 by Dilip Davda

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Muthoot Finance NCD Offer review Dec 2015

Frequent visitor of debt market Muthoot Finance Ltd (MFL) is once again entering debt market to mobilize Rs. 250 crore via Secured/un-secured redeemable non-convertible debentures with a green shoe option to retain hundred per cent oversubscription. Thus the aggregate size of the debt offer is Rs. 500 crore.

MFL is a RBI registered NBFC primarily engaged in Gold Loan financing. To meet its funding requirements, the company is offering NCDs having face value of Rs. 1000 each to mobilize Rs. 500 crore. Issue has already opened for subscription on 11.12.15 and will close on or before January 11, 2016. Minimum application is to be made for 10 NCDs and in multiple of 1 NCD thereon, thereafter. This offer is graded as CRISIL AA-/Stable that indicates high degree of safety regarding timely servicing of financial obligations. Issue is lead managed by ICICI Securities Ltd and A K Capital Services Ltd. IDBI Trusteeship Services Ltd is Debenture Trustee. Link Intime India Pvt Ltd is the registrar to the issue. Post allotment, instruments will be listed on BSE. Allotment is available in demet as well as physical mode, however, trading will take place only in demet mode.

This offer is having a coupon rates ranging from 8.75% to 10.00% and having Monthly, Annually or cumulative payment options and tenure of 400 days, 24 months, 36 months, 60 months and 87 months as per the choice of investors. It offers additional incentive of 0.75% to non-institutional and individual categories II and III respectively.

On performance front, for last two fiscals, its revenue and net profits have shown declining trends. Its current debt equity ratio of 3.83 will rise to 3.93 post this issue.

Conclusion: In the likely environment of interest rates cooling down going forward, investors looking for regular interest income may consider investment in this offer.

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.

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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. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. 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, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com


1 Comments

chandra
1. chandra  Jan 9, 2016 07:46 I Like It. | I Don't Like It. | Report Abuse Reply
Is it worth to invest in this or IREDA tax free bonds sir (considering the TDS aspect as well)?







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