Muthoot NCD issue to open on Aug 23

The non-convertible debentures (NCD) issue of Muthoot Finance Ltd (MFL) will open on August 23. The company plans to raise Rs 1,000 crore through the public issue of debentures, said George Alexander Muthoot, managing director of the company.

The NCD issue, with three investment options and an effective yield of up to 12.25 per cent per annum closes on September 5 with an option of early closure.

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 thereafter. The NCDs would be listed on the National Stock Exchange and the Bombay Stock Exchange, he said.

The issue has been rated AA-/stable by Crisil and AA- (stable) by ICRA for an amount of up to Rs 1,000 crore. There are three investment options in the issue.

The company said the funds raised through the issue would be utilised 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’s gold loan portfolio as of March 31, 2011, consisted of 4.7 million loan accounts, serviced through 2,733 branches across 20 states. It has since increased its branch network to 2,997 branches and employs 19,125 persons in its operations.

The lead managers to the issue are ICICI Securities, HDFC Bank, JM Financial Consultants, Kotak Mahindra Capital Company and YES Bank. The co-lead managers to the issue are Karvy Investor Services and RR Investors Capital Services.