Muthoot Finance to raise Rs 1,000 cr via NCDs

Muthoot Finance, country's largest gold financing company in terms of loan portfolio, today said it was raising up to Rs 1,000 crore through a public issue of secured redeemable non-convertible debentures (NCDs).

The company plans maiden public issue of secured, redeemable NCDs of face value of Rs 1,000 each aggregating up to Rs 500 crore with an option to retain over subscription up to Rs 500 crore, aggregating to a total of up to Rs 1,000 crore, a company statement said.

The NCD issue with three investment options and effective yield of up to 12.25% a year opens on August 23 and closes on September 5, 2011.

The face value of each NCD is Rs 1,000 and the minimum application is for five NCDs (Rs 5,000) and in multiples of one NCD thereafter.

The NCDs are proposed to be listed on the National Stock Exchange and the Bombay Stock Exchange.

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 and working capital requirements.

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, to meet short-term liquidity requirements.