Muthoottu Mini Financier NCD Offer review - July 2015 (Avoid)

Kerala based-Muthoottu Mini Financiers Ltd (MMFL) - a frequent visitor with debt market offers - is coming out with its 5th offer (since February 2014) of Secured Redeemable NCD offer of Rs. 125 crore with a green shoe option to retain 100 per cent oversubscription and thus making total offer size of Rs. 250 crore. The offer opens for subscription on 16.07.15 and will close on or before 14.08.15. It is offering NCD having face value of Rs. 1000 each with coupon rate ranging from 11.00% to 11.50%. Existing debenture holders are offered 0.25% additional coupon rate. These NCDs have tenure of 500 days, 36 months, 45 months and 72 months with Monthly, Annual and Cumulative options. Based on tenure and interest payment options, it gives yield of 11.25% to 12.25%. Application is to be made for a minimum of 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD thereon, thereafter.

The company is a registered NBFC and is in the business of Gold loan and is also offers depository participant services as well as money transfer and insurance broking services. Its Net NPAs has gone up from 0.29% in 2012/13 to 1.48% in 2014/15. Its current debt equity ratio of 3.46 times will rise to 4.03 times post this issue. Its net profit is showing declining trends for last three fiscals at Rs. 47.32 crore (FY 2012-13), Rs. 33.66 crore (FY 2013-14) and Rs. 18.48 crore (FY 20214-15).

Issue is lead managed by Vivro Financial Services Pvt Ltd and Link Intime India Pvt Ltd is the registrar to the issue. IL&FS Trust Company Ltd is the debenture trustee. Post allotment, these NCDs will be listed on BSE. Although allotment is available in demat or physical mode, trading will take place only in demat mode.


Conclusion / Investment Strategy

This debt offer is rated BBB- (Triple B minus) by CARE, indicating moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk as well.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Dec 13, 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 Muthoottu Mini Financiers NCD July 2015 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if Muthoottu Mini Financiers NCD July 2015 worth investing. The Muthoottu Mini Financiers NCD July 2015 Note sets the NCD expectations in systematic way which tells you if Muthoottu Mini Financiers NCD July 2015 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Muthoottu Mini Financiers NCD July 2015 by providing NCD recommendations i.e. subscribe, avoid and neutral.


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