Muthoot Finance to raise Rs 1,000 cr through public issue of bonds

Muthoot Finance on Thorsday said it will raise up to Rs 1,000 crore through public issue of bonds to fund its business growth.

In its 24th series of public issue of secured redeemable non-convertible debentures, Muthoot Finance will issue bonds of face value of Rs 1,000 each with a base size of Rs 100 crore with an option to retain over-subscription up to Rs 900 crore aggregating up to tranche limit of Rs 1,000 crore, it said in a release.

The issue opens on Friday (December 11), and closes on January 5, 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 allotment will be on first come first serve basis.

The non-banking financial company said there are six investment options in the present issue with monthly or annual interest payment frequency or 'on maturity redemption' payments with coupon ranging from 6.75 to 7.75 per cent per annum.

The funds raised through this issue will be utilised primarily for lending activities of the company, Muthoot Finance said.

"In our 24th public issue of NCDs, we wish to focus on retail and high networth individual investors and we have allocated 90 per cent of the issue for this segment. At a time when interest rates have significantly come down, we are able to offer attractive interest rates to retail and high networth individual investors.

"We look forward for the market to accept the current issue too in line with our previous NCD issues as there are limited comparable investment avenues available," said George Alexander Muthoot, Managing Director, Muthoot Finance.

The bonds are proposed to be issued under this issue have been rated CRISIL AA/Positive by CRISIL and [ICRA] AA (Stable) by ICRA, the company said.

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 the BSE.

The lead managers to the issue are Edelweiss Financial Services, J M Financial, Equirus Capital Pvt Ltd and A K Capital Services Limited. IDBI Trusteeship Services is the debenture trustee and Link Intime India Pvt Ltd is the registrar to the issue.