Muthoot Finance to raise ₹300 crore through public issue of secured NCDs

The issue will open on 28 November and will close on 19 December. However, there will be an option to close the issue on a much earlier date or on extended date, as may be decided by the board of directors or NCD committee.

Muthoot Finance said the issue size is with a base size of ₹75 crore with an option to retain oversubscription up to ₹225 crores aggregating up to tranche limit of ₹300 crore (issue).

The secured NCDs proposed to be issued under this issue have been rated [ICRA] AA+ (Stable) by the credit rating agency ICRA. “The rating of the Secured NCDs by ICRA indicates ‘high degree of safety regarding timely servicing of financial obligations’,” Muthoot Finance said.

The issue offers a rate of return of 7.75% to 8.25% to retail and High Networth Individual (HNI) investors. The interest rate on the upcoming issue has been increased by 0.25%-0.35% compared to the last issue.

George Alexander Muthoot, managing director, Muthoot Finance said, “We plan to utilise these funds in our primary lending activities. With the backdrop of the increase in interest rates by RBI, we have also increased interest rates on NCDs offered in this issue by 0.25%-0.35% p.a. for tenors of 2, 3 and 5 years. We value the safety of our investors and assure them with our AA+/Stable rating, coupled with an attractive rate of return of 7.75% to 8.25% p.a. We expect that the issue will see good demand from investors.”

The NCDs are proposed to be listed on the BSE and the allotment will be on a first come first serve basis.

There are seven investment options for secured NCDs with monthly or annual interest payment frequency or ‘on maturity redemption’ payments. 90% of the issue is allotted for retail and HNI investors who will be benefited with 0.50% more than the interest rate applicable for institutions and corporates.