Muthoot said the fund will enable the Kerala-based company to further diversify and strengthen funding source.
Largest gold loan financier Muthoot Finance has raised USD450 million through its maiden three-year dollar bond sale, offering an annual coupon of 6.125 percent. This is also the first instance of a gold loan company from the country tapping the dollar debt market.
The Reg S issue (which are meant for only non-resident US investors) has received an orderbook of over USD 1.2 billion from 117 accounts, with the maximum investor interest coming in from the US (35 percent), followed by Europe and Middle East (28 percent each) and 27 percent from Asians, the company said.
“The response to our debut international bond issue reiterates the robustness and long-track record of our gold loan business and is also a recognition of the country’s retail credit story,” Muthoot Finance promoter and chairman MG George Muthoot said in the statement.
The proceeds will be used for onward-lending in accordance with RBI’s ECB guidelines and other applicable laws, he added. Muthoot said the fund will enable the Kerala-based company to further diversify and strengthen funding source.
Nearly 88 percent of the investors are asset-mangers, 6 percent are insurers and pension funds and the balance banks and others. Deutsche Bank and StanChart acted as the joint global coordinators and joint book runners for the issue. Deutsche Bank India head for debt capital markets Sameer Gupta said, “the deal saw an overwhelming response from global investors, exhibiting the strong credit profile of the issuer. We were able to achieve a 2.5x oversubscription and tap quality investors across geographies.”
The bonds will be listed on the London Stock Exchange. The company has a branch network of 4,502 spanning 23 states, Delhi-NCR and five Union territories and employees 24,644. Its loan assets stood at Rs 34,246 crore as of March 2019 with a net income of Rs 1,972 crore for FY19.