Muthoot Finance to raise INR 2,000 crore via a public issue of NCDs

Muthoot Finance Ltd, a gold loan financier will raise INR 2,000 crore via a public issue of NCD (non-convertible debentures) to be launched next week.

The company has filed a shelf brochure for matter of secured and redeemable non-convertible debentures of a face value of INR 1,000 each accumulating INR 1,950 crore and unsecured of a face value of INR 1,000 each accumulating INR 50 crore, adding the total to INR 2,000 crore, said Muthoot Finance in exchange filing.

Muthoot said the funds raised will be utilized mainly for lending activities. “The tranche issue is with a base issue size of Rs 200 crore with an option to retain subscription up to shelf limit of Rs 2,000 crore,” it said.

The public is company’s 17th public issue of NCDs and will open on April 11 to be closed by May 10.

“The issue provides an opportunity to retail and high net worth individual investors, to whom we have allocated 60 percent of total issue size, an opportunity to have stable and attractive long term returns when there are only limited comparable alternative avenues for investments,” George Alexander, MD, Muthoot Finance.

There are overall ten investment options for Secured NCDs with monthly/annual interest expense frequency or on maturity recovery payments with yield from annually 8-9 percent.

An investment option for unsecured NCDs is a scheme that doubles the invested amount in 96 months with an actual yield of 9.06 percent per annum, said the company.