Muthoottu Mini Financiers NCD Issue - Feb 2014 (Avoid)

This week in primary market a shocking reports came from Maiam Global Foods that was the first main line IPO since May 2013 to open on 20.02.14 and had road shows in Mumbai on 18.02.14 announced cancellation of shows and postponed the issue.

While we have three Tax Free bonds offer on, one more debt offer from private sector in the form of lucrative NCD is opening this week. Details of the same are as under:

Muthoottu Mini Financiers Limited: (MMFL)

MMFL is a RBI registered NBFC and having headquartered in the state of Kerala and belongs to the Muthoottu Mini Group. The operations at Kozhencherry, district Pathanamthtta, Kerala and has over two decades of established history in the money lending business, mainly in small scale money lending against used household gold jewellery. It has been in the gold loan financing since 1986 and the Company has been extending Gold Loans since 2006.

To meet it various financing activities requirement the company is offering Secured Non-Convertible debentures of face value of Rs. 1000 each having a coupon rate ranging from 12% to 13% based on category and the tenure. The original offer size is Rs. 100 crore with green shoe option of keeping additional Rs. 100 crore in case of oversubscription thus making a total size of Rs. 200 crore. Minimum application is to be made for 5 NCDs (i.e. Rs. 5000) and in thereafter, in multiples of 1 NCD. The offer is opening for subscription on 19.02.14 and will close on or before 12.03.14. This offer is rated BB+ by CARE indicating moderate risk of default regarding timely servicing of financial obligations. Tenure for this offer is for 400 days, 24 months, 36 months and 66 months. It also has monthly and cumulative interest payment for all tenures except for 36 months wherein it also offers yearly payment and has the upper coupon rate. Existing debenture holders are being offered 0.25% extra on all categories and tenure. Allotment will be made in demat and physical modes, but trading will take place only in demat mode.

Teams of Lead managers are SBI Capital Markets Limited, Vivro Financial Services Private Limited and Link Intime India Pvt. Ltd is the registrar. IL & FS Trust Company is the Debenture Trustee. These NCDs will be listed on BSE post allotments.


Conclusion / Investment Strategy

Not Worth

Although the company is offering lucrative coupon rates, lower rating makes it a risky bet. The company has backing of loyal investors, who might support it, but others should be cautious.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Dec 12, 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 Feb 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 Muthoottu Mini Financiers NCD Feb 2014 worth investing. The Muthoottu Mini Financiers NCD Feb 2014 Note sets the NCD expectations in systematic way which tells you if Muthoottu Mini Financiers NCD Feb 2014 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Muthoottu Mini Financiers NCD Feb 2014 by providing NCD recommendations i.e. subscribe, avoid and neutral.


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