Muthoottu Mini NCD Oct. 24 issue review - (May apply)

•    MMFL is a Muthoottu Mini group arm engaged in gold loan and other financial services.
•    This is the 18th offer from this company since February 2014.
•    Last debt offer was in the month of April 2022. 
•    Issue rated as CARE A-/Stable. Such rating indicates low credit risk in servicing.
•    This time it has further increased the coupon rates with improved credit rating. 
•    Investors looking for steady regular income may park moderate funds.

ABOUT COMPANY:
Muthoottu Mini Financiers Ltd. (MMFL) a Muthoottu Mini group company is a non-deposit taking systemically important NBFC in the gold loan sector lending money against the pledge of household gold jewellery ("Gold Loans") in the state of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Haryana, Maharashtra, Gujarat, Delhi and Goa and the union territory of Puducherry. 

The company also has microfinance loan segment wherein it provides unsecured loans to joint liability group of women customers (minimum of 5 persons) who require funds to carry out their business activities through few of its branches in the state of Kerala. 

MMFL, as of September 30, 2024, had a network of 920 branches spread in the states of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Haryana, Maharashtra, Gujarat, Delhi, Uttar Pradesh and Goa and the union territory of Puducherry and it employed 4,672 persons in business operations.

ISSUE DETAILS:
For the purpose of onward lending and for repayment of interest and principal of existing loans (at least 75%) and also for general corporate fund needs (up to 25%), MMFL is coming out with its debt offer of secured, redeemable, non-i.e. Rs 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE. MMFL is spending Rs. 2.30 cr. for mobilizing Rs. 150 cr. 

Vivro Financial Services Pvt. Ltd. is the sole lead manager for this offer. Mitcon Credentia Trusteeship Services Ltd. is the debenture trustee while Link Intime India Pvt. Ltd. is the registrar to the issue. 

This issue has tenure of 450 days, 26 months, 36 months, 48 months and 66 months. It is offering coupon rates ranging from 8.50% to 10.00%. Interest payments mode is Monthly or Cumulative as per the choice of investors. The company has raised the coupon rates with a little higher credit rating. 

CREDIT RATING:
Issue is rated CARE A-/Stable by Care Ratings Ltd. It indicates that instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations and carry low credit risk. These ratings are not a recommendation to buy, sell or hold securities and investors should take their own decisions. The rating given CARE Ratings is valid as on the date of this Prospectus and shall remain valid on date of the issue and allotment of NCDs and the listing of the NCDs on BSE. These ratings are subjected to a periodic review during which it may be affirmed, changed, suspended, withdrawn, or placed on rating watch, based on one or more specific events.

FINANCIAL PERFORMANCE:
For the last three fiscals, MMFL has posted total income/net profit of Rs. 430.25 cr. / Rs. 46.29 cr.  (FY22), Rs. 544.44 cr. / Rs. 67.28 cr. (FY23), Rs. 671.84 cr. / Rs. 77.83 cr. (FY24). For the Q1 of FY25 ended on June 30, 2024, it has earned net profit of Rs. 23.52 cr. on a total income of Rs. 186.57 cr. The company has posted steady growth in its top and bottom lines for the reported periods. 

As of June 30, 2024, its Net NPAs stood at 0.56% against 0.72% for FY24. Its current debt equity ratio of 5.10 as of March 31, 2024, will stand enhanced to 5.31 post this issue.