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Sep 02, 2013, 05.29 PM IST | Source: Moneycontrol.com

Muthoot Finance NCD issue opens for subscription

Public issue by Muthoot Finance of secured, redeemable, non-convertible debentures and unsecured redeemable non-convertible debentures of face value of Rs 1,000 each, aggregating upto Rs 1,500 million with an option to retain over-subscription upto Rs 1,500 million for issuance of additional NCDs aggregating to a total of upto Rs 3,000 million.

Muthoot Finance , the largest gold financing company in India in terms of loan portfolio according to the IMaCS Industry Report, 2012 Update, has opened its public issue of secured, redeemable, non-convertible debentures and unsecured, redeemable, non-convertible debentures (NCDs) for subscription today. It aims to raise upto Rs 150 crore through this issue, with an option to retain oversubscription upto Rs 150 crore, aggregating to a total of upto Rs 300 crore.

The NCD issue with eleven investment options and effective yield of upto 12.55 percent (per annum) will close on September 16, 2013. The face value of each NCD is Rs 1,000 and the minimum application is for ten NCDs (Rs 10,000) (for all options of NCDs, namely Option I, II, III, IV, V, VI, VII, VIII, IX, X, XI either taken individually or collectively) and in multiples of one NCD thereafter.

The NCDs are proposed to be listed on the BSE.

The NCDs proposed to be issued under this issue have been rated AA-/negative by CRISIL and AA-/negative by ICRA.

There are ten investment options for secured NCDs:

Option I: The maturity date is 24 months from the deemed date of allotment and the interest is payable monthly. The coupon rate and effective yield is 11.50 percent per annum (p.a.).

Option II: The maturity date is 36 months from the deemed date of allotment and the interest is payable monthly. The coupon rate and effective yield is 12.00 percent per annum (p.a.).

Option III: The maturity date is 60 months from the deemed date of allotment and the interest is payable monthly. The coupon rate and effective yield is 11.50 percent per annum (p.a.).

Option IV: The maturity date is 24 months from the deemed date of allotment and the interest is payable annually. The coupon rate and effective yield is 12.00 percent per annum (p.a.).

Option V: The maturity date is 36 months from the deemed date of allotment and the interest is payable annually. The coupon rate and effective yield is 12.25 percent per annum (p.a.).

Option VI: The maturity date is 60 months from the deemed date of allotment and the interest is payable annually. The coupon rate and effective yield is 12 percent per annum (p.a.).

Option VII: The maturity date is 400days from the deemed date of allotment and the effective yield is 11 percent per annum (p.a.).

Option VIII: The maturity date is 24 months from the deemed date of allotment and the effective yield is 12 percent per annum (p.a.).

Option IX: The maturity date is 36 months from the deemed date of allotment and the effective yield is 12.55 percent per annum (p.a.).

Option X: The maturity date is 60 months from the deemed date of allotment and effective yield is 12 percent per annum (p.a.).

The investment options for unsecured NCDs:

Option XI: The maturity date is 72 months from the deemed date of allotment and effective yield is 12.25 percent per annum (p.a.).
 
The funds raised through this issue will be utilised by the company for various financing activities including lending and investments, to repay existing liabilities or loans and towards business operations including for capital expenditure, working capital requirement and other general corporate purposes.

The company provides personal and business loans secured by gold jewellery, or gold loans, primarily to individuals who possess gold jewellery, but could not access formal credit within a reasonable time, or to whom credit may not be available at all, to meet unanticipated or other short-term liquidity requirements.

As of June 30, 2013, the company has branch network of 4163 branches. Its gold loan portfolio as of March 31, 2013 comprised approximately 6.5 million loan accounts.

The lead manager to the issue is ICICI Securities Limited.

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