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Muthoot Finance NCD (Tranche I) issue review (Apply)

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Muthoot Finance Ltd (MFL), primarily a largest gold loan NBFC company in India, having diverse financial activities and wind mill business now is a frequent visitor to the debt market. MFL is once again coming out with its 17thdebt offer. While the company is coming out with an issue of Rs. 200 crore under Tranche I, it has shelf limit of Rs. 2000 crore covering offer of Rs. 1950 crore of fully secured NCDs and Rs. 50 crore of Un-secured NCDs. The issue is opening for subscription on 11.04.17 and will close on or before 10.05.17. Minimum application is to be made for 10 NCDs and in multiple of 1 NCD thereon, thereafter. Although allotment is available in demat as well as physical mode, trading will take place only in demat mode. This issue is rated ICRA AA/Stable and CRISIL AA/Stable. The rating of the Secured NCDs and Unsecured NCDs by ICRA and CRISIL indicates high degree of safety regarding timely servicing of financial obligations. Issue is jointly managed by Edelweiss Financial Services Ltd and A K Capital Services Ltd. IDBI Trusteeship Services Ltd is the Debenture Trustee and Link Intime India Pvt Ltd is the registrar to the issue. Post allotment, NCDs will be listed on BSE.

These NCDs have face value of Rs. 1000 each and the interest payment options are available in monthly, annually and Cumulative modes and having tenures of 400 days, 18 months, 24 months, 38 months and 60 months depending on the choice of investors. It offers coupon rates ranging from 8.15% to 9% based on the tenure and the interest payment options. Post entire issue, its current debt-equity ratio of 3.32 times will stand enhanced to 3.68 times. The company is going to use 75% of the net proceeds of the issue for lending purpose and the balance for general corporate purpose. As on 31.12.16, it had 4308 branches in 23 states and 1495 customer relation executives. More than 50 per cent business of the company comes from Southern Regions.

On financial performance aspect, its net NPAs had rise from 0.57% in fiscal 2012 to 2.46% in Fiscal 2016. On a consolidated basis for the last two fiscals, the company has posted total income and net profits of Rs. 4336.55 cr. / Rs. 671.55 cr. (FY15) and Rs. 4940.76 cr. / Rs. 817.84 cr. (FY16).

Conclusion / Investment Strategy

Considering the ratings, Investors looking for steady interest income may invest for medium to long term.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on November 22, 2019

Review 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.


The Muthoot Finance NCD April 2017 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 Finance NCD April 2017 worth investing. The Muthoot Finance NCD April 2017 Note sets the NCD expectations in systematic way which tells you if Muthoot Finance NCD April 2017 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Muthoot Finance NCD April 2017 by providing NCD recommendations i.e. subscribe, avoid and neutral.