|Issue Date||09/01 - 04/02|
|Issue Size||Rs. 250.00 Cr|
|Issue Price||Rs. 1000|
|Rating||BWR A+ /Stable, CRISIL A/Stable|
|Tenor||400 days/ 24 months/ 38 months/ 60 months|
|Series||Series I to Series XI|
|Payment Frequency||Monthly, Annual and Cumulative|
|Basis Of Allotment||First Come First Serve Basis|
Incorporated in 1997, Muthoot Fincorp Limited is a non-deposit taking NBFC. The company is primarily engaged in the business of offering personal and business loans which are secured by gold ornaments and jewellery. The gold loan product is available for personal and business purposes to meet short-term liquidity requirements of the individuals.
Muthoot Fincorp on January 8 announced that it is looking to raise Rs 480 crore through a public issue of bonds.
The issue opens on January 9 and is scheduled to close by February 4. It has been rated A/Stable by CRISIL and A+/Stable by Brickwork Rating. It offers coupon rates ranging between 9.36-10 percent on maturities of 400 days, 24 months, 38 months and 60 months. SMP Capital is the lead manager to the issue.
Muthoot Fincorp Ltd. (MFL) is a non-deposit taking, systemically important NBFC registered with the RBI bearing registration no. 16.00170 dated July 23, 2002 under Section 45 IA of the RBI Act. The Company is one of the largest Indian NBFCs engaged primarily in the business of providing personal and business loans secured by gold jewellery and ornaments ("Gold loans"). Its Gold loan products include Muthoot Blue Guide Gold loan, Muthoot Blue Bright Gold loan, Muthoot Blue Power Gold loan, Muthoot Blue Bigg Gold loan, Muthoot Blue Smart Gold loan and 24x7 Express Gold loan.
MFL's Gold loan products are structured to serve the business and personal purposes of individuals who do not have ready or timely access to formal credit or to whom credit may not be available at all, to meet unanticipated or other short-term liquidity requirements. The Gold loan portfolio of our Company as of September 30, 2019 comprised approximately 31.15 lakhs loan accounts that were serviced through 3,569 branches located across 20 states, union territory of Andaman and Nicobar Islands and the national capital territory of Delhi. As of September 30, 2019, our Company employed 16,583 employees including 308 contracted experts in its operations.
In addition to the Gold loan business, the Company provides foreign exchange conversion and money transfer services as sub-agents of various registered money transfer agencies. It is also engaged in wind energy as well as real estate business through joint ventures. For Real estate business, it is exploring its own land bank.
MFL is coming out with its Secured Redeemable Non-Convertible debentures of ₹1000 each for a base amount of ₹250 cr. It has green shoe option to retain oversubscription of ₹230 cr. thus making the overall size of the offer ₹480 cr. Issue opens for subscription on 09.01.2020 and will close on or before 04.02.2020. Minimum application is to be made for 10 NCDs (₹10000) and in multiple of 1 NCD (₹1000) thereon, thereafter. Post allotment NCDs will be listed on BSE. Application to be made only by ASBA mode and allotment will be in demat mode only. MFL will spend ₹6.15 cr. for the proceeds of the entire amount of ₹480 cr. Out of the available net proceeds 75% will be used for working capital, repayment of interest and principal of existing loans and the balance for general corporate purpose.
This is the 5th debt offer from the company since July 2014. Last offer was in September 2019.
This offer has tenures of 400 days, 24 months, 38 months and 60 months. It offers coupon rates ranging from 9.00% to 10% depending on the options applied for. Interest payment will be either Monthly, Yearly or Cumulative as per the choice of investors.
Issue is solely lead managed by SMC Capitals Ltd. while Integrated Registry Management Services Pvt. Ltd. is the registrar to the issue and Catalyst Trusteeship Ltd. is the Debenture Trustee.
The NCDs proposed to be issued under this Issue have been rated "A (Stable)" for an amount of ₹50,000 lakhs by CRISIL Limited ("CRISIL") vide their letter dated October 10, 2019 and further revalidated by their letter dated December 26, 2019 and rated "BWR A +" Outlook: Stable)' for an amount of ₹50,000 lakhs, by Brickwork Ratings India Pvt. Ltd. ("Brickworks") vide their letter dated December 12, 2019.
Thomas John Muthoot, Thomas George Muthoot and Thomas Muthoot are the promoters of the company.
The following table details the objects of the Issue and the amount proposed to be financed from the Net Proceeds:
On financial performance front, MFL has (on a consolidated basis) posted total revenue/net profits of ₹2657.39 cr. / ₹119.90 cr. (FY18) and ₹3353.76 cr. / ₹372.61 cr. (FY19). For the half year and six months period ended September 30, 2019 and Fiscal 2019 revenues from Gold loan business constituted 82.85% and 82.86% of its total income on standalone basis as per Ind AS, respectively. For the half year and six months period ended September 30, 2019 and Fiscal 2019 the gold loan portfolio of the Company earned an interest of ₹1091.22 cr. and ₹2058.97 cr. on standalone basis as per Ind AS, respectively. For the said periods, it's Gross and Net NPAs were 2.62%/1.17% and 3.24%/1.46% respectively.
As on 30.09.19 it's paid up equity capital of ₹193.71 cr. is supported by free reserves of ₹2755 cr. Post issue its current debt equity ratio of 3.77 will stand enhanced to 3.92.
Coupon rates are attractive with A+ (Stable) rating amidst falling interest scenario. Currently many debt offers are being re-rated and recent offers are receiving lukewarm response. Considering these, cash surplus investors looking at steady returns may consider moderate investment for long term. (Subscribe for long term).
Muthoot Fincorp Limited NCD will open on 09/01 and close on 04/02.
The issues price of Muthoot Fincorp Limited NCD is Rs.1000.
The lot size of Muthoot Fincorp Limited NCD is 10.
The Rating of Muthoot Fincorp Limited NCD is BWR A+ /Stable, CRISIL A/Stable.
The Tenor of Muthoot Fincorp Limited NCD is 400 days/ 24 months/ 38 months/ 60 months.
The Series of Muthoot Fincorp Limited NCD is Series I to Series XI.
The Payment Frequency of Muthoot Fincorp Limited NCD is Monthly, Annual and Cumulative.
The Basis of Allotment of Muthoot Fincorp Limited NCD is First Come First Serve Basis.