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Muthoot Fincorp NCD – Not Worth

Published on Wednesday, July 2, 2014 by Dilip Davda | Modified on Sunday, September 27, 2015

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Muthoot Fincorp NCD – Not Worth

Kerala-based Muthoot Fincorp, the flagship company of the Muthoot Pappachan Group, is a diversified company engaged in financial services that includes gold loans, housing finance etc, hospitality business, Automotive, Infra, Realty, and IT etc. is entering the primary market with its maiden debt offer. The base size of the offer is Rs. 100 crore with a green shoe option to retain 100% oversubscription; the total issue size is Rs. 200 crore.

The company is issuing Secured NCD of Rs. 1000 each having interest rates of 11.25% to 12% depending on the monthly, annual and cumulative options as per choice of investors and hopes to mobilize Rs. 200 crore. Funds so mobilized will be used to increase its loan portfolio. The issue opens for subscription on 03.07.14 and will close on or before 04.08.14. Minimum application is to be made for 10 NCDs and in multiple of 1 thereon, thereafter. Allotment of the same is available in demat as well as physical mode, however, trading will take place only in demat mode. For cumulative scheme too these NCDs are not available in physical mode. Post allotment, these NCDs will be listed on BSE.

These NCDs have been rated by CRISIL as “CRISIL A/Negative” indicating adequate degree of safety regarding timely servicing of financial obligations, however, such instruments carries low credit risk. This issue is lead managed by SMC Capitals Ltd and Integrated Enterprises (India) Ltd is the registrar to the issue. SBICAP Trustee Company Ltd is the Bond Trustee.

Although, the company offers lucrative coupon rate, lower grading makes it a risky bet.

Remark: Not Worth

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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


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