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• This is the 17th debt issue from this company since July 2014.
• The last debt issue was in September 2023.
• The issue is rated as CRISIL/AA- Stable by CRISIL Ltd.
• Well-informed investors may park moderate funds for regular income.
ABOUT COMPANY:
Muthoot Fincorp Ltd. (MFL) has been engaged in the Gold loans business for over two decades and is headquartered in Kerala, India. The Company provides retail loan products, primarily comprising of Gold loans. Its Gold loan products include Muthoot Blue Guide Gold loan, Muthoot Blue Bright Gold loan, Muthoot Blue Power Gold loan, Muthoot Blue Bigg Gold loan, Muthoot Blue Smart Gold loan and 24x7 Express Gold loan. The product of MFL, the "24x7 Express Gold loan" can be utilised by individuals who require quick loans against their gold jewellery and who have an existing loan with the Company. This is a type of top up loan. "Smart Plus Gold loan", the other Gold loan variant of the Company is specifically designed for salaried customers, with tenure of up to 24 months.
The Gold loan portfolio of the Company as of June 30, 2023 comprised approximately 31.00 lakhs loan accounts. As of June 30, 2023 it operated out of 3,619 branches located across 24 states, including union territory of Andaman and Nicobar Islands and the national capital territory of Delhi and employed 19,008 employees including 110 contracted experts in its operations.
ISSUE DETAILS:
The company is coming out with its 17th Debt offer as NCD Tranche II - October 2023 issue. It will issue NCDs worth Rs. 75 cr. as the base size with a green shoe option of retaining additional subscription to the tune of Rs. 150 cr., thus making the overall issue size worth Rs. 225 cr. The company has a shelf limit of Rs. 1100 cr. The issue of Secured, Redeemable, Non-convertible debentures of Rs. 1000 each is opening for subscription on October 13, 2023, and will close on or before October 27, 2023.
The minimum application is to be made for 10 NCDs (Rs. 10000) and in multiple of 1 NCD (Rs. 1000) thereon, thereafter. Post-allotment NCDs will be listed on BSE.
MFL will spend about Rs. 0.85 cr. for the proceeds of the entire amount of Rs. 225 cr. Out of the available net proceeds, at least 75% will be used for onward lending, financing, repayment/prepayment of existing borrowings with interest, and the balance up to 25% for general corporate purposes.
The issue is solely lead managed by SMC Capitals Ltd. while Integrated Registry Management Services Pvt. Ltd. is the registrar of the issue and Vardhman Trusteeship Pvt. Ltd. is the Debenture Trustee.
It has maintained the coupon rates between 8.65% to 9.44% and has the same tenors like previous issue for 24 months, 26 months, 60 months and 96 months. Interest payment will be either Monthly, Annual, or Cumulative as per the selection of the series applied for.
ISSUE RATING:
This offer is rated as CRISIL/AA- Stable by CRISIL. The rating of the NCDs indicates that instruments with this rating are considered to have an adequate degree of safety regarding the timely servicing of financial obligations. Such instruments carry very low credit risk.
The ratings provided by CRISIL Ratings Limited may be suspended, withdrawn, or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. These ratings are not a recommendation to buy, sell or hold securities, and Investors should take their own decisions.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, MFL has (on a consolidated basis) posted total revenue/net profits of Rs. 4101.19 cr. / Rs. 397.28 cr. (FY21) and Rs. 4355.13 cr. / Rs. 412.55 cr. (FY22), and Rs. 5151.33 cr. / Rs. 646.42 cr. (FY23). Thus it has posted steady growth in its top and bottom lines during reported periods. For Q1 of FY24 ended on June 30, 2023, it earned a net profit of Rs. 109.98 cr. on a total income of Rs. 869.70.
Net NPAs as of March 31, 2023, stood at 0.59% against 1.59% as of March 31, 2022. Its current debt equity ratio as of the said date of 6.16 will stand enhanced to 6.21 post this issue.
Review By Dilip Davda on October 8, 2023
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 before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
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.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The Muthoot Fincorp NCD October Tranche II 2023 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if Muthoot Fincorp NCD October Tranche II 2023 worth investing. The Muthoot Fincorp NCD October Tranche II 2023 Note sets the NCD expectations in systematic way which tells you if Muthoot Fincorp NCD October Tranche II 2023 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Muthoot Fincorp NCD October Tranche II 2023 by providing NCD recommendations i.e. subscribe, avoid and neutral.
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