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Muthoot Finance NCD offer - Nov 2014 (Neutral)

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This Gold Loan Company is a frequent debt market visitor from South that is making its 11th Debt offer that is opening on 19.11.14. In fact, this is the fourth offer from this company in 2014. Off late, declined prices of Gold has already had its impact as this company is planning auction of Gold kept as security against loans to recover its lending.

The company is again coming out with a Secured Non-Convertible Debentures having a face value of Rs. 1000 each to mobilize Rs. 200 crore with a green shoe option to retain 100 per cent oversubscription thus raising the total issue size to Rs. 400 crore. The company is offering this issue with coupon rates ranging from 10% to 10.50% to QIPs and FIs whereas 10.75% to 11.25% to HNIs and Retail investors. This offer has tenure ranging from 24, 36 and 60 months and special 400 day tenure to suit individual needs of parking their funds. Interest payment will be done on Monthly or Annual basis as per the choice of investors. Minimum application is to be made for 10 NCDs and in multiples of 1 NCD thereon, thereafter. This offer is available in demat and physical format, however, trading will take place only in demat mode. Issue opens for subscription on 19.11.14 and will close on or before 18.12.14 depending on the response. Post allotment, NCDs will be listed on BSE. This 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- rating to this offer indicating a high degree of safety regarding timely servicing of financial obligations. The rating provided by ICRA may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating.

When inflation has started cooling down and the market is expecting a rate cut from RBI in its forthcoming policy meet in first week of December, this offer appears lucrative. But considering the status of Gold Loan Company due to sliding gold prices, it also raises doubt on immediate future prospects of such companies.


Conclusion / Investment Strategy

In its recent previous offers, the company managed to garner response from its loyal investors and may continue to do so. However, no need to get tempted from higher coupon rates offered now as last few quarters have shown declining trends in top and bottom line. In fact, in today's online regime, investors are well informed to make the final decision on investment at their own discretion.

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