Muthoot Finance Limited NCD

NCD Detail

Muthoot Finance Limited NCD is launching a debt offering that will be open for subscription from April 12 to April 26, 2023. Established in 1997, Muthoot Finance Limited is a gold loan non-banking financial company (NBFC) based in Kerala, with a family business legacy spanning 800 years. The company offers services including Gold loans, Home Loans, Personal Loans, Insurance, Gold Coins, Money Transfer Services, Foreign Exchange, Mutual Funds, Micro Finance, and Vehicle loans.

As of September 30, 2022, Muthoot Finance managed around 8.16 million gold loan accounts in India, serviced through its 4,641 branches spread across 22 states, Delhi’s national capital territory, and six union territories. The company employed 27,204 individuals in its operations during this time.

By March 31, 2022, Muthoot Finance had accumulated borrowings of Rs. 276,630.69 million from banks and financial institutions.

About Company

Muthoot Finance Ltd. (MFL) frequently accesses the debt market, having made its 31st debt offer since August 2011, with the most recent on February 23. As the largest gold loan NBFC in India by loan portfolio, MFL was ranked first by CRISIL Limited in its March 2023 Industry Report on Gold Loans. The company primarily offers personal and business loans secured by gold jewellery, or Gold Loans, to individuals who cannot obtain formal credit quickly or at all to address unexpected or short-term liquidity needs.

CRISIL’s March 2023 report shows that MFL had the most extensive branch network among Indian gold loan NBFCs. As of December 31, 2022, its Gold Loan portfolio comprised approximately 8.11 million loan accounts serviced through 4,672 branches across 22 states, Delhi’s national capital territory, and six union territories in India. At that time, the company employed 26,399 people in its operations. MFL’s branches serve as the primary point of sale, assisting with loan origination, the disbursal and collection processes, and facilitating customer interaction.

Besides its Gold Loans business, MFL offers money transfer services as sub-agents of various registered agencies and provides collection agency services through its branches. The company has also begun offering unsecured loans to individuals, loans to traders and the self-employed, and provides micro-finance, housing finance, vehicle and equipment finance, and insurance broking services via its subsidiaries.

Issue Details

MFL is launching its 31st secured, redeemable NCD issue, with each NCD priced at Rs 1000, aiming to raise Rs 75 crore. The company has a green shoe option to retain oversubscription up to Rs 225 crore, bringing the total offer size to Rs 300 crore and a shelf limit of Rs 2,600 crore. The minimum application requirement is 10 NCDs (Rs 10,000) with subsequent multiples of 1 NCD (Rs 1,000). The subscription period runs from April 12, 2023, to April 26, 2023. After allotment, the NCDs will be listed on BSE exclusively.

MFL is allocating Rs 3 crore for this Tranche I debt offer, with a minimum of 75% of the remaining amount earmarked for onward lending and financing and up to 25% for general corporate purposes. The issue allotment is distributed as follows: QIBs 5%, Non-Institutional 5%, HNIs 40%, and Retail investors 50%.

A K Capital Services Ltd. is the sole lead manager, with Link Intime India Pvt Ltd as the registrar and IDBI Trusteeship Services Ltd as the Debenture Trustee for this issue. The NCDs have been rated ICRA AA+/Stable by ICRA Ltd, indicating high safety and very low credit risk regarding timely financial obligation servicing. However, the rating may be revised, withdrawn, or suspended at any time and should be independently evaluated.

The debt offer features tenors of 25, 37, and 61 months, with coupon rates ranging from 7.75% to 8.10%. As investors choose, interest payment options include monthly, annual, or cumulative. An additional 0.50% incentive is available to HNIs and Retail investors (categories III and IV).

Financial Performance (Amount in Rs Crore)

Important Dates

Coupon Rates

NCD Rating

The NCDs planned for issuance under this Issue have received an [ICRA] AA+/Stable rating (denoted as ICRA Double A plus rating with a stable outlook) from ICRA Limited.

Company Promoters

The promoters of the company are George Thomas Muthoot, George Jacob Muthoot, and George Alexander Muthoot.

The Objective of the Issue

The company intends to use the funds raised through the Issue for the following purposes in the specified ratio: at least 75% of the amount raised and allotted in the Issue will be directed towards lending, while general corporate purposes will not exceed 25% of the funds raised and allotted in the Issue.

How to Apply

Wait for the NCD to open for subscription, then click on this link to apply for the Muthoot Finance Limited NCD with Bigul https://ncd.bonanzaonline.com/. 

How to Check Allotment Status

The registrar for Muthoot Finance Limited NCD is Link Intime India Private Ltd. To check your allotment status, please click on this link https://linkintime.co.in/

FAQs 

• When will the Muthoot Finance Limited Tranche I NCD April 2023 public issue be open for subscription? 

The Muthoot Finance Limited Tranche I NCD April 2023 issue will open on April 12, 2023, and close on April 26, 2023. Note that if the issue is fully subscribed (base + shelf) before the closing date, it may close early. Allotment occurs on a first-come, first-served basis.

• What is the timetable for the Muthoot Finance Limited Tranche I NCD April 2023 issue? 

The important dates for the Muthoot Finance Limited NCD issue are:

• The issue opens: April 12, 2023
• The issue closes: April 26, 2023

• What is the price of the Muthoot Finance Limited Tranche I NCD April 2023 issue? 

The price for the Muthoot Finance Limited Tranche I NCD April 2023 is Rs 1000 per NCD.

• What is the face value of the Muthoot Finance Limited Tranche I NCD April 2023? 

The NCDs will be issued with a face value of Rs 1000 each.

• What is the interest payment frequency for the Muthoot Finance Limited Tranche I NCD April 2023? 

Interest payments for the Muthoot Finance Limited Tranche I NCD April 2023 will be made monthly and annually.

• What is the minimum application size for investing in the Muthoot Finance Limited Tranche I NCD April 2023 public issue? 

Each application should be for a minimum of 10 NCDs and multiples of 1 NCD after that.

• When does the Muthoot Finance Limited Tranche I NCD April 2023 subscription close? 

The Muthoot Finance Limited Tranche I NCD April 2023 subscription will remain open on working days from 10:00 am to 5:00 pm until April 26, 2023. The subscription may close earlier if it is fully subscribed.

• What are the tenors of the Muthoot Finance Limited Tranche I NCD April 2023 bonds? 

The NCDs have fixed maturity dates of 25, 37, and 61 months.

• What is the base issue size of the Muthoot Finance Limited Tranche I NCD April 2023? 

The Muthoot Finance Limited Tranche I NCD April 2023 consists of a base issue and a shelf issue:

• NCD Base Issue Size: Rs 75 Crore
• NCD Shelf Issue Size: Rs 300 Crore

The shelf issue is an option to retain oversubscription up to the shelf issue size over and above the base issue.

• Can NRIs apply for the Muthoot Finance Limited NCD IPO? 

No, NRIs are not eligible to apply for this issue.

• Who is ineligible to invest in the Muthoot Finance Limited issue? 

Ineligible investors include 

• minors without a guardian name
• foreign nationals
• persons residing outside India
• foreign portfolio investors
• foreign venture capital investors
• qualified foreign investors
• overseas corporate bodies
• and persons ineligible to contract under applicable statutory/regulatory requirements.