Muthoot Finance Ltd will issue secured, redeemable, non-convertible debentures to raise up to Rs600 crore. The NCDS will open for subscription on 22 December and close on 7 January 2012, the Kerala-based company said in a filing with the Bombay Stock Exchange (BSE).
Muthoot Finance Limited is the largest gold financing company in India in terms of loan portfolio, according to the IMaCS Research & Analytics Industry Reports, Gold Loans Market in India, 2009.
The NCDS will have a face value of Rs1,000 each, aggregating to Rs300 crore, with an option to retain over-subscription of up to Rs300 crore, aggregating to a total of Rs600 crore.
The minimum application is for five NCDs (Rs5,000) and in multiples of one NCD thereafter.
The NCDs offered through the prospectus are proposed to be listed on BSE Limited, the company said.
The NCDs have four investment options and an effective yield of up to 13.43 per cent (per annum).
Both Crisil and Icra have given an `AA-/Stable' rating for the NCDs.
The closure date may be advanced as might be decided by the duly authorised committee of the board of directors of the company subject to necessary approvals, the company said in a press release.
There NCDS have three investment options:
Option 1: The maturity date is 24 months from the deemed date of allotment and the interest is payable annually. The coupon rate and effective yield is 13.00 per cent per annum. for NCD Holders in Category 1, Category II and Category III.
Option II: The maturity date is 36 months from the deemed date of allotment and the interest is payable annually. The coupon rate and effective yield is 13.25 per cent per annum for NCD holders in Category 1, Category II and Category III.
Option III: The maturity date is 60 months from the deemed date of allotment and the interest is payable annually. The coupon rate and effective yield is 13.25 per cent per annum for NCD holders in Category 1, Category II and Category III.
Option IV: The maturity date is 66 months from the deemed date of allotment and effective yield is 13.43 per cent per annum and investment amount doubles in 5-½ years for NCD holders in Category I, Category II and Category III.
The funds raised through this issue will be utilised for various financing activities, including lending and investments, to repay existing liabilities or loans and towards business operations, including for capital expenditure and working capital requirements, after meeting the expenditures of and related to the Issue and subject to applicable statutory/regulatory requirements, the release said.
The company provides personal and business loans secured by gold jewellery, or gold loans, primarily to individuals who possess gold jewellery but could not access formal credit within a reasonable time, or to whom credit may not be available at all, to meet unanticipated or other short-term liquidity requirements.
As of 30 September 2011, the company had a network of 3,274 branches. The company's gold loan portfolio comprised approximately 5.5 million loan accounts in India that is serviced through 3,274 branches across 20 states, the national capital territory of Delhi and four union territories in India.
The company employs around 21,543 persons in its
ICICI Securities, AK Capital Services, HDFC Bank and Karvy Investor Services Limited are lead managers to the issue while SMC Capitals Limited and RR Investors Capital Services (P) Limited are co-lead managers.