Muthoot Finance on Friday announced that it will raise `2,000 crore through a public issue of non- convertible debentures (NCDs). The company has filed a shelf prospectus for issuing secured redeemable non-convertible debentures of face value of `1,000 each worth `1,950 crore and unsecured NCDs of face value of `1,000 each aggregating `50 crore. So, the total amount raised will be up to `2,000 crore.
The issue opens on Tuesday and closes on May 10, 2017, the company said in a statement. Muthoot said funds raised through this issue will be utilised primarily 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,” the company said.
There are ten investment options for secured NCDs with monthly or annually interest payment frequency or on maturity redemption payments with the yield from 8-9 % annually. Investment option for unsecured NCDs is a scheme which doubles invested the amount in 96 months with an effective yield of 9.06% per annum, the company said.“The issue provides an opportunity to retail and high net worth individual (HNIs) investors, to whom we have allocated 60% of the total issue size, an opportunity to have stable and attractive long-term returns when there are only limited comparable alternative avenues for investments,” Muthoot Finance MD George Alexander said in a statement. The lead managers to the issue are Edelweiss Financial Services and AK Capital Services. IDBI Trusteeship Services is the debenture trustee.Muthoot Finance is a gold financing company and has network of approximately 4,294 branches across the country.
Crisil and ICRA have rated the issue with high degree of safety at ‘AA/stable’.
Stock of the company on Friday ended 0.26% down at `379.95 on the BSE.