Muthoot Fincorp Limited NCD Company Profile:

Muthoot Fincorp Limited (“MFL”) is a non-deposit-taking, systemically important NBFC registered with the RBI. As the Muthoot Pappachan Group’s flagship financial firm, it has carried on the more than 132-year-old tradition of empowering millions of Indians in their grit and resolve to climb above their ordinary lives and towards an ambitious tomorrow. The goal of Muthoot Fincorp Limited, which has about 3500 branches throughout India, is to assist more than 100,000 clients each day. In addition to the products offered by other Group companies, it also provides a wide range of financial services and products, including Gold Loans, Small Business Loans, Affordable Housing Loans, Two-Wheel Finance, Used-Car Finance, Domestic Money Transfer, International Remittance, Foreign Exchange, Insurance Products & Services, Wealth Management Services, and more for the general public.

Muthoot Fincorp Limited is coming out with a debt offering of Secured Redeemable Non-Convertible Debentures with a face value of Rs. 1000 each, a Base Issue size of ₹ 100 Crore, and an option to retain oversubscription up to ₹ 300 Crore aggregating up to ₹ 400 crores, being the Issue size. The issue opens for subscription on Friday, 1st September 2023, and will close on or before Thursday, 14th September 2023. The allotment is on a first come first serve basis with the minimum application to be made of 10 NCDs. A minimum of 75% of the Net Proceeds raised through this Issue will be utilized For the purpose of Working Capital and the remaining 25% for general corporate purposes.

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    Muthoot Fincorp Limited NCD Details:

    Issue opens: Friday, 1st September 2023
    Issue closes: Thursday, 14th September 2023
    Allotment: First Come First Serve Basis
    Face Value: Rs.1,000 per NCD
    Issue Price: Rs.1,000 per NCD
    Nature of Instrument: Secured Redeemable Non-Convertible Debentures
    Minimum Application: 10 NCDs (Rs.10, 000) & in multiple of 1NCD
    Listing: Proposed on BSE
    Credit Rating: CRISIL AA-/Stable by Crisil Rating
    Issue Size: Base Issue size of ₹ 200 Crore with an option to retain oversubscription up to ₹ 200 Crore aggregating up to ₹ 400 crore

    Being the Issue size.

    Listing: BSE
    Category I – Institutional (“QIB”) II – Non-Institutional (“Corporates and HNI”) IV – Retail Individual (“Retail”) (Amount aggregating up to and including ₹ 10 lakh)
    Category Allocation of the Overall Issue Size 5% 35% 60%
    Bucket Size (₹) assuming Issue size of ₹ 400Cr ₹ 20 Cr ₹ 140 Cr ₹ 240 Cr

                                                       Muthoot Fincorp Limited NCD

    Application form

    Muthoot Fincorp Limited NCD Specific Terms of the Prospectus:

    Frequency of Interest Payment Monthly Monthly Monthly Annual Annual Annual Cumulative Cumulative Cumulative Cumulative
    Tenor 24 months 36 months 60 months 24 months 36 months 60 months 24 months 36 months 60 months 96 months
    Coupon Rate (% p.a.): 8.65% 8.90% 9.05% 9.00% 9.27% 9.44% NA NA NA NA
    Effective Yield (% p.a.): 8.99% 9.26% 9.43% 8.99% 9.26% 9.43% 8.99% 9.26% 9.43% 9.05%
    Amount (₹ / NCD) on Maturity: ₹ 1,000/- ₹ 1,000/- ₹ 1,000/- ₹ 1,000/- ₹ 1,000/- ₹ 1,000/- ₹1,188/- ₹ 1,305/- ₹1,570/- ₹2,001/-

    The terms of the NCDs offered under the Issue are as follows:

    Strengths of the company:

    • MFL is one of the largest Indian NBFCs engaged primarily in the Gold loans business in terms of the size of its Gold loans portfolio. Accordingly, the company has extensive experience a strong brand image, and track record in the Gold loans business across India.
    • As of March 31, 2023, the Company had 3,619 branches located across 24 states, including the union territory of Andaman and Nicobar Islands and the national capital territory of Delhi, with a significant presence in South India. The customers of the Company are typically retail customers, small businessmen, vendors, traders, farmers, and salaried individuals, who for reasons of convenience, accessibility, or necessity, avail of its credit facilities by pledging their gold with the company rather than by taking loans from banks and other financial institutions
    • As on the date of the Prospectus, the Company has been assigned CRISIL AA-/Stable rating by CRISIL and BWR AA- /Stable rating by Brickworks for its bank facilities, CRISIL AA-/Stable rating by CRISIL and BWR AA-/(Stable) rating by Brickworks for its various non-convertible debt instruments, CRISIL A/Stable rating by CRISIL for ₹ 49900 lakh perpetual bonds and BWR A+/Stable rating by Brickworks for ₹ 37,400 lakh perpetual bonds and CRISIL A1+ rating by CRISIL for its short term debt program. Brickworks has assigned a BWR A1+ rating for our short-term debt program.

    Risk factors:

    • MFL’s ability to access capital also depends on its credit ratings. Any downgrade of the credit ratings would increase borrowing costs and constrain access to capital and lending markets and, as a result, would negatively affect the net interest margin and the business
    • MFL may not be able to recover the full loan amount, and the value of the collateral may not be sufficient to cover the outstanding amounts due under defaulted loans. Failure to recover the value of the collateral could expose the company to a potential loss, thereby adversely affecting the financial condition and results of operations.