Muthoot Finance to raise Rs 790 crores through secured redeemable NCDs

Muthoot Finance Ltd has announced its 22nd series of Public Issue of Secured Redeemable Non-convertible Debentures. The issue is with a base issue size of Rs 100 crores with an option to retain oversubscription up to Rs 690 crores aggregating up to tranche limit of Rs 790 crores (“Tranche IV issue”). The issue opens on November 29, 2019 and closes on December 24, 2019 with an option to close on such earlier date or an extended date as may be decided by the Board of directors or NCD committee. The Lead Managers to the issue are Edelweiss Financial Services Limited and AK Capital Services Limited. IDBI Trusteeship Services Limited is the Debenture Trustee for the issue. Link Intime India Private Limited is the Registrar to the Issue.

 Informing about the fund-raiser decision George Alexander Muthoot, Managing Director, Muthoot Finance Ltd, said “The issue will help the company to have long term funds and diversify borrowing basket as well. The previous NCD issues were well received in the market and were over-subscribed.” He further added, “It provides an opportunity to Retail and High Networth Individual investors, to whom we have allocated 80% of the total issue size, with  stable and attractive long term returns when there are only limited comparable alternative avenues for investments.”

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The issue is rated by two Credit Rating Agencies – CRISIL Ltd and ICRA Ltd. Both agencies have awarded a long-term debt rating of ‘AA/Stable’ for the debentures offered under the issue. The rating scale denotes a ‘High degree of safety regarding timely servicing of financial obligations and very low credit risk’. The NCDs are proposed to be listed on BSE. The allotment is based on a first come first serve basis.
 
There are ten investment options for Secured NCDs with ‘Monthly’ or ‘Annual’ interest payment frequency or ‘on maturity redemption’ payments with effective yield per annum ranging from 9.25 per cent to 10 per cent. The funds raised through this issue will be utilised primarily for the lending activities of the Company.