Muthoot Finance to raise Rs 1,700 crore via NCDs

The issue is with a base issue size of Rs 100 crore with an option to retain oversubscription up to Rs 1600 crore aggregating up to tranche limit of Rs 1700 crore.

In a regulatory filing made after market hours yesterday, the NBFC announced its 25th series of public issue of secured redeemable non-convertible debentures (NCDs) of face value of Rs 1,000 each.

"The issue opens on 08th April, 2021 and closes on 29th April, 2021 with an option to close on such earlier date or extended date as may be decided by the board of directors or NCD committee, the non-banking finance company said in a statement.

The secured NCDs proposed to be issued under this issue have been rated CRISIL AA+/ Stable by CRISIL and [ICRA] AA+ (Stable) by ICRA. The rating of the secured NCDs by CRISIL and ICRA indicates high degree of safety regarding timely servicing of financial obligations.

The NCDs are proposed to be listed on BSE. The allotment will be on first come first serve basis.

There are 8 investment options for secured NCDs with 'monthly' or 'annual' interest payment frequency or 'on maturity redemption' payments with coupon ranging from 6.60% p.a. to 8.25% p.a.

George Alexander Muthoot, managing director, Muthoot Finance, said This is the first NCD Public Issue after our credit rating got upgraded to AA+ by CRISIL and ICRA. Incidentally, this is our 25th public issue of NCDs too. We have allocated 80% of the issue for retail and high net worth individual investors who will be getting 0.25% p.a. more than the interest rate applicable for institutions and corporates.

In the issue, investors get the twin advantage of better rating as well as attractive interest rate. We have also introduced a 10-year NCD for those investors who want to lock in the interest rates for long period as well as reduce the uncertainty of fluctuations in interest rates in future. We are expecting a good response for the issue.

The funds raised through this issue will be utilized primarily for lending activities of the company.

Separately, the company informed that a meeting of the board of directors of Muthoot Finance is scheduled to be held on Monday, 12 April 2021, to consider and declare an interim dividend for the financial year 2020-21. The company has fixed Friday, 23 April 2021, as the record date for the same.

Shares of Muthoot Finance were up 1.70% at Rs 1225. Muthoot Finance is the largest gold financing company in India in terms of loan portfolio.

The company's consolidated net profit jumped 16.90% to Rs 1,006.63 crore on 15.93% increase in total revenue from operations at Rs 3,000.78 crore in Q3 December 2020 over Q3 December 2019.

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