Published on Monday, January 16, 2017 by Dilip Davda
Muthoot Finance Ltd (MFL) – a frequent visitor to the debt market is once again bringing its NCD offer.
MFL is primarily a gold finance company has diversified its money transfer services, providing cash withdrawal through while label ATMs etc. To meet its business funding needs for onward lendingsand meeting general corpus fund needs, it is coming out with s a Tranche I of its 11th issue in last five years. The company is aiming to raise Rs, 1400 crore as a shelf limit with a secured NCD worth Rs. 1300 crore and unsecured NCD worth Rs. 100 crore. Issue opens for subscription on 17.01.17 and will close on or before 17.02.17. Under Tranche I the base size is Rs. 200 crore and green shoe option to retain further Rs. 1200 crore thus making a total issue of Rs. 1400 crore.
TheNCDs are having a face value of Rs. 1000 each and tenures of 400 days, 18 months, 24 months, 36 months and 60 months. It offers coupon rates ranging from 8.50 per cent to 9.25 per cent and interest payment options of Monthly, Annual and Cumulative, depending on the choice of investors and category. Minimum application is to be done for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD (i.e. Rs. 1000) thereon, thereafter. Issue is lead managed by Edelweiss Financial Services Ltd and AK Capital Services Ltd. IDBI Trusteeship Services Ltd is the Debenture Trustee and Link Intime India Pvt Ltd is the registrar to the offer. Post allotment, NCDs will be listed on BSE. CRISIL and ICRA both have rated this offer as AA/Stable indicating high degree of safety regarding timely servicing of financial obligations. Post issue, company’s debt-equity ratio will stand enhanced to 3.57 times from 3.32 times.
For last three fiscals, the company has shown setback for FY15 and its net NPAs have gone up from 1.57% to 2.46%. However, the company has loyal investors backing in southern region.
Conclusion: Considering its rating and the debt-equity ratio, investors looking for steady interest income may consider investment as its coupon rates are lucrative.
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
