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Muthoottu Mini Financiers NCD Offer – Avoid

Published on Thursday, July 10, 2014 by Dilip Davda | Modified on Monday, December 28, 2015

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Muthoottu Mini Financiers NCD Offer – Avoid

Muthoottu Mini Financiers is coming out with its second debt issue. This time, it is coming out with an issue of Secured and Unsecured Redeemable Non-Convertible Debentures having face value of Rs. 1000 and offering monthly, yearly and cumulative interest payment options. The scheme is for a period of 500 days to 60 months and has a coupon rate of 12% to 13% based on tenure and the option selected by investors. This issue is rated IND-RA BB+ by India Rating indicating moderate risk of default regarding timely servicing of financial obligations.

Existing debenture holders, Ex-Service Man and Senior Citizens are being offered 0.25% additional interest on the investment. Cumulative scheme is for 500 days, 39 months and 60 months while Yearly payment scheme is for 36 months. Monthly payment scheme is available for 500 days and 36 months. This issue offers yields between 12.68% and 13.43% depending on tenure and option selected by the individual investors. These debentures are available in physical and demat mode but trading will take place only in demat mode. Post allotment, it will be listed on BSE.

Issue size is Rs. 125 crore with a green shoe option to retain 100% oversubscription, thus making the total issue size of Rs. 250 crore. It opens for subscription on 11.07.14 and will close on or before 05.08.14. Minimum application is to be made for 10 NCDs and in multiple of 1 thereon, thereafter.

Issue is lead managed by Vivro Financial Services Pvt Ltd and SBI Capital Markets Ltd and Link Intime India Pvt Ltd is the registrar to the issue. IL & FS Trust Company Ltd is the Debenture Trustee.

Although this offer has lucrative coupon rate, poor rating makes in non-worthy bet.

Remarks: Avoid

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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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