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Muthoot Finance NCD Issue Offer - Aug 2014 (Avoid)

Muthoot Finance Ltd Logo

Muthoot Finance, a frequent visitor to capital market with its debt offer is coming out with its 2nd offer in this year and 10th in last four years.

The company is aiming to raise total Rs. 400 crore via this offer that is of a base size of Rs. 200 crore with a green shoe option to retain 100 per cent oversubscription. Funds so raised will be used for lending. This offer is of Secured Non Convertible Debentures having face value of Rs. 1000 each and a coupon rate ranging from 10 to 10.75 per cent and having tenure of 400 days, 24 months, 36 months and 60 months. The company is offering 0.75 per cent extra incentives to select investors and thus this offer are giving yield between 10.75 to 11.50%. Minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD thereon, thereafter. This offer is available in demat as well as physical mode, but trading will take place only in demat mode. Issue opens for subscription on 18.08.14 and will close on or before 18.09.14 depending on response. Post allotment these NCDs will be listed on BSE. Issue is lead managed by ICICI Securities Ltd and Link Intime India Pvt. Ltd. is the registrar to the offer. IDBI Trusteeship Services Ltd is the Debenture trustee. ICRA has assigned ICRA AA-/stable indicating at high degree of safety regarding timely servicing of financial obligations.

This NBFC Company primarily engaged in gold loan and has suffered a setback for the fiscal 2014 with lower top and bottom lines. Post this issue company's debt equity ratio will be at 4.67 which are alarming. Considering this, the issue is not worth.


Conclusion / Investment Strategy

Based on basic parameters, issue is not worth.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Dec 10, 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.

Email: dilip_davda@rediffmail.com

The Muthoot Finance NCD Aug 2014 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 Aug 2014 worth investing. The Muthoot Finance NCD Aug 2014 Note sets the NCD expectations in systematic way which tells you if Muthoot Finance NCD Aug 2014 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Muthoot Finance NCD Aug 2014 by providing NCD recommendations i.e. subscribe, avoid and neutral.


1 Comments

1. Abhishek  Aug 29, 2014 10:24
12% coupon rate instruments are trading below face value then why invest in this issue.
Muthoot NCD 934956 trading at 980 for 11.25% for NHI & .75% incentive for retail.