Frequent visitor in debt market with its offer, Muthoot Finance Ltd (MFL) is once again tapping debt market with its offer of Rs. 250 crore secured/unsecured redeemable non-convertible debentures of Rs. 1000 each with a green shoe option to retain 100% oversubscription and thus raising the total size of the issue to Rs. 500 crore.
This is the thirteenth debt offer from MFL. It is offering NCDs having face value of Rs. 1000 each for a tenure ranging from 400 days to 60 months and is offering coupon rate ranging from 8.75% to 9.50% depending on tenure and the category. Category II and III i.e. Non-institution and Individuals are offered additional incentive of 0.75% across the tenure. Minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD (i.e. Rs. 1000) thereon, thereafter. Unsecured NCDs have tenure of 84 months with a coupon rate ranging from 9.66% to 10.41%. Issue is lead managed by ICICI Securities Ltd and Edelweiss Financial Services Ltd. Link Intime India Pvt Ltd is the registrar to the issue. IDBI Trusteeship Services Ltd is the debenture trustee. Issue opens for subscription on 07.09.15 and will close on or before 07.10.15. Post allotment, NCDs will be listed on BSE. Allotment is available in physical and demat mode as desired by investors. However, trading will take place only in demat mode.
For last three fiscals its top and bottom line has shown declining trends from Rs. 538.71 crore/Rs. 100.42 crore (FY 2013) to Rs. 432.46 crore/Rs. 67.05 crore (FY 2015). As the company is primarily in gold loan segment, sliding gold prices has caused concern. Its current debt/equity ratio of 3.83% will rise to 3.93% post issue.
This issue is having ICRA AA- rating from ICRA indicating at high degree of safety regarding timely servicing of financial obligations. However, as per market perception, there are few takers for offers with such ratings.
Review By Dilip Davda on November 22, 2019
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
