Muthoot Finance Limited was incorporated in 1997. It is a Kerala-based gold loan Non-Banking Finance Company with a great history and legacy of 800 years of being engaged in the business of gold loans. The company servicer portfolio includes Gold Loan, Personal Loan, Housing Finance, Home Loans, Insurance, Money Transfer Services, Gold Coins, Foreign Exchange, Micro Finance, Mutual Funds, and Vehicle loan. The company has a very wide customer base of more than 70 Crore+ customers with a network of around 5,330 branches and 40,000 employees. The company currently holds an Assets Under Management of around Rs. 54,688 crores. In this article, we take a closer look at the Muthoot Finance NCD IPO details.
The company, this time, has come up with its 24th NCD-based debt offer. The company is the largest gold loan NBFC. The company has a PAN India Presence with reach in 22 states and the Delhi NCR and UT regions. The branches of the company act as the primary point for their business operation by the sale of loan origination along with the disbursal and collection processes considering the customer interaction and customer beneficiary business model. The company’s major source of business has been derived from South India, where it generates around 50% of the total gold loan portfolio. South India is a big short-term credit market via Gold Loans, and Muthoot Finance has been an undisputed leader in this segment.
OBJECTS OF THE ISSUE:
The company stated that the funds been raised from the proceeds of the NCD would be utilized to:
- For onward lending.
- Financing along with the repayment and the prepayment of the interest and the principal of the outstanding dues of the company.
- General Corporate Purposes.
MUTHOOT FINANCE NCD IPO APRIL 2022 DETAIL:
Muthoot Finance has recently launched its 24th Debt-based NCD offer after getting approval from its board. The company has developed secured, redeemable, and non-convertible debentures with an effective yield of 8.3-9.37 %. The company, in its proposal, stated that the base size of the issue is around Rs.200 crore with an option of green-shoe option to extend and raise the NCD offer to Rs. 400 crores. Muthoot Finance stated that the funds raised by the company would be used for the funding of the working capital along with the general corporate purposes.
| Issue Open | April 7, 2022 to April 29, 2022 |
| Security Name | Muthoot Finance Limited |
| Security Type | Secured, Redeemable Non-Convertible Debentures |
| Base Issue Size | Rs. 100.00 Crores |
| Shelf Issue Size | Rs. 400.00 Crores |
| Issue Price | Rs. 1000 per Non-Convertible Debentures |
| Face Value | Rs. 1000 each Non-Convertible Debentures |
| Minimum Lot size of NCD | 10 NCD that corresponds to Rs.10,000 |
| Market Lot of the NCD | 1 NCD |
| Listing At | BSE |
| Credit Rating | Credit rating as per ICRA: ICRA AA+/ Stable |
| Tenor of the NCD | 36, 60, 84 and 120 months |
| Series | Series I to VIII |
| Payment Frequency of the NCD | Monthly and Annually |
| Basis of Allotment of the NCD | First Come First Serve Basis |
| Options | Tenure | Frequency of Interest Payment | Coupon (% per annum) for NCD Holders in Category I, II, III & Iv | Redemption Amount (₹ /NCD) on Maturity for NCD Holders in Category I, II, III & IV (%) | Effective Yield for NCD Holders in Category I, II, III & IV (%) | Put and Call Option |
| I | 36 months | Monthly | 7.00% | 1,000 | 7.00% | NA |
| II | 60 months | Monthly | 7.25% | 1,000 | 7.25% | NA |
| III | 36 months | Annual | 7.25% | 1,000 | 7.25% | NA |
| IV | 60 months | Annual | 7.50% | 1,000 | 7.50% | NA |
| V | 84 months | Annual | 7.75% | 1,000 | 7.75% | NA |
| VI | 120 months | Annual | 8.00% | 1,000 | 8.00% | NA |
| VII | 36 months | NA | 7.25% | 1,233.65 | 7.25% | NA |
| VIII | 60 months | NA | 7.50% | 1,435.63 | 7.50% | NA |
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STRENGTHS AND OPPORTUNITIES:
- The company has marked consistency in constant growth and an expansion of its market presence and market reach.
- The company has also registered very good growth in the Trailing 12 months on an EPS basis. Muthoot Finance EPS growth is 413.9%.
- Muthoot Finance has also marked increasing profits and revenue and a display of scale business growth with geographical diversification.
- The company is in a market leader position in the gold loan business with a very strong market presence in the semi-urban and rural sectors.
- The company can consider itself in a very advantageous position regarding the changes in government regulations that will affect its sector of operation, along with changes in social patterns, lifestyles, and demographic profiles.
- Muthoot Finance will also benefit from the rise in the demand for gold due to the lockdown implications and many global funds currently carrying out Hedge against Equity via Gold.
- In recent years, the company has also marketed a major decline in its provisioning.
- The company has also made many strategic acquisitions and joint ventures to carry out an expansion plan of its business profile and operations.
MUTHOOT FINANCE NCD IPO ALLOCATION RATIO:
| Category of the Allocation | NCD Allocation | NCD’s Reserved |
| Institutional Investors | 5% | 50,000 |
| Non-Institutional Investors | 5% | 50,000 |
| High Net worth Investors | 40% | 400,000 |
| Retail Investors | 50% | 500,000 |
| Total NCD’s | 100 % | 1,000,000 |
COMPANY FINANCIALS:
| Particulars | For the year ending with the amount as in Millions | ||||
| 31 March 21 | 31 March 20 | 31 March 19 | |||
| Total Assets | 634,649.24 | 504,596.54 | 3,80,687 | ||
| Total Revenue | 105,743.59 | 87,227.91 | 68,806.30 | ||
| Profit After Tax | 37,221.78 | 30,183 | 19,721.42 |
NCD RATING
The NCD offer of the company has been rated at ICRA AA+/ Stable as per the stable growth outlook of the company. The rating by the ICRA is as per a high degree of safety regarding timely servicing of all the company’s financial obligations. The company holds a very low credit risk. The only concern of the NCD offer is that four lead managers led the last NCD-based debt offer, while this time, the NCD offer has only been managed by one lead manager.
ICRA has considered the NCD offer on the growth prospects of the company on the operational as well as the financial performance front. The only issue in the NCD Offer is Low Coupon Rates amidst Inflation raising concerns.
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PROMOTERS OF THE COMPANY:
The promoters of the company are as follows:
- George Thomas Muthoot
- George Jacob Muthoot
- George Alexander Muthoot
Also Read : List of Mainboard IPO’s in India.
Also Read : List of Upcoming SME IPO’s in India.
MUTHOOT FINANCE NON-CONVERTIBLE DEBENTURES REGISTRAR:
Link Intime India Private Limited
C-101, 1st Floor,
247 Park, Lal Bahadur Shastri Marg,
Vikhroli (West), Mumbai 400 083,
Maharashtra, India
Phone: +91 22 4918 6200
Fax: +91 22 4918 6195
Email: mfl.ncd2022@linkintime.co.in
Website: www.linkintime.co.in
MUTHOOT FINANCE CONTACT DETAILS:
Muthoot Finance Limited
2ndFloor, Muthoot Chambers,
Opposite Saritha Theatre Complex
Banerji Road, Kochi 682018
Phone: +91484 6690255
Email: ncd@muthootgroup.com
Website: www.muthootfinance.com
