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This is the second debt offer in this fiscal from Muthoot Group's Muthoot Fincorp Ltd (earlier known as Muthoot Debt Management Services Ltd). The company is again coming out with a debt offer of Rs. 150 crore NCDs with a green shoe option of keeping 100% over subscription thus making the issue size of Rs. 300 crore.
The issue is opening for subscription on 15.09.14 and will close on or before 15.10.14. The company is offering Secured and Un-secured Redeemable Non-Convertible Debentures of Rs. 1000 each to raise Rs. 300 crore out of which 75% will be used for lending and the balance for general corpus fund. This issue carries coupon rates varying from 10.25% to 12.25% and having a tenure ranging from 400 days to 72 months. The interest payment term is Monthly, Yearly and Cumulative. Minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and thereafter in multiple of 1 NCD. Investors can opt for demat or physical mode of this instrument, however, trading will take place in demat mode only.
On performance front, the company has suffered a severe setback for 2013-14 with a net profit of Rs. 63.27 crore on a total income of Rs. 1975.32 crore against net profit of Rs. 210.40 crore on a total income of Rs. 2078.09 crore for a year ago period.
Issue is lead managed by SMC Capital Ltd and Integrated Enterprises (I) Ltd is the registrar to the issue. SBICAP Trustee Company Ltd is the debenture trustee. Post allotment, NCDs will be listed on BSE. This issue is rated as 'CRISIL A/Stable' by CRISIL indicating at adequate degree of safety regarding timely servicing of financial obligations and such instruments carry low credit risk.
Considering the recent working and second offer in a short span of just three months, it is better to stay away from this offer.
Review By Dilip Davda on December 10, 2019
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 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 Fincorp NCD 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 worth investing. The Muthoot Fincorp NCD Note sets the NCD expectations in systematic way which tells you if Muthoot Fincorp NCD good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Muthoot Fincorp NCD by providing NCD recommendations i.e. subscribe, avoid and neutral.
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