Muthoot Fincorp NCD launches with yields up to 9.62%
×
Register Now for Loan From Home!

  • Muthoot FinCorp NCD Launches with Yields up to 9.62%

    Muthoot FinCorp NCD Launches with Yields up to 9.62%

    Muthoot FinCorp NCD is being offered in tenors ranging from 27 months to 60 months and is rated ‘A’ by CRISIL

    Muthoot FinCorp Ltd launched a non-convertible debenture (NCD) issue, offering yields up to 9.62% for a five-year tenor, on Monday. You can opt for monthly, annual, or cumulative interest payment options.

    The issue which opened on 28th September 2020 will remain open till 23rd October 2020. The NCD is being offered in tenors ranging from 27 months to 60 months and is rated “A” by CRISIL. The issue size is ₹200 crore, with the company retaining the right to keep an additional ₹200 crore from the proceeds.

    About Muthoot FinCorp

    Muthoot FinCorp Ltd. is part of the Muthoot Pachappan Group alternatively known as Muthoot Blue and should not be confused with Muthoot Finance, a listed entity which is part of a separate corporate group which has a legacy of 133+ years and over 4,200 branches across the country.

    Muthoot FinCorp on a standalone basis had a net worth of ₹3,006 crore and assets under management of ₹14,359 crore, as on 31 December 2019, according to a CRISIL ratings note issued in May 2020.

    Muthoot FinCorp is a non-banking finance company (NBFC) engaged in lending against gold. It also has a substantial non-gold lending business such as microfinance and vehicle finance at more than 40% of the portfolio, as on 31 December 2019, according to the note. Gross non-performing assets (NPAs) were at 2.5%, as on 31 December 2019, it added.

    “Muthoot FinCorp has issued six NCD public issues aggregating to ₹1,940 crore in the last six years and mobilized ₹1,639.81 crore. The company has promptly redeemed maturing NCDs and serviced interest at all times,” said company Chairman Thomas John Muthoot in emailed response to Mint

    Muthoot Fincorp NCD Sept 2020 Structure and Details are as follows:
    Muthoot Fincorp NCD Sept 2020 Structure and Details

    Muthoot Fincorp NCD Vii Issue Structure

    Download Muthoot Fincorp NCD Prospectus

    What are the Credit Ratings for These NCDs?

    Experts have taken a cautious view of the NCD due to its A rating (rather than AA or AAA). “At a time when default related issues have been a concern and economic situation remains uncertain, investing in Muthoot, which has a Crisil A rating, is only for those who have a high-risk appetite. Investors should not subscribe to it by only looking at the attractive interest rates, and they must be sure to factor in the element of high risk while taking a decision. Overall, unnecessary risk on the fixed-income side of the portfolio should be avoided,” said Prableen Bajpai, founder, FinFix, a financial research and wealth management firm.

    Anand K. Rathi, founder partner, Augment Capital Advisors LLP, highlighted that the company’s non-gold exposure is a concern. “Those who really want to invest should stick to the smallest tenor of 27 months and choose the monthly interest option,” he said.

    How the Returns from These NCD Bonds are Taxed?

    Interest on NCDs is taxed at your income tax slab rate. Hence, investors, particularly those in the highest tax bracket, should consider the post-tax yield on such NCDs. For example, the 27-month NCD offers a pre-tax interest rate of 8.85%. Post-tax, this is likely to fall to 6.19% for someone who is in the 30% tax bracket.

    How to Subscribe to These Bonds?

    This issue is available in only in demat form. You can apply online through by logging to your demat account. Application forms can be downloaded on the lead manager web site. For more information refer prospectus.

    Should You Invest in Muthoot Fincorp NCD in 2020?

    Always diversify your portfolio by investing in multiple investment plans and don’t put your hard-earned money in single NCD bond or fixed deposit or in 1 equity mutual fund. If you have high-risk appetite and willing to consider all the risks indicated above, you can invest in these NCDs. I would re-iterate again, that these are high risk, hence invest only a small portion in such investment options if you still want to proceed.

    Originally Posted on

    Harshit Agrawal 30-Sep-2020 3902 Views

About Author

Harshit Agrawal -
Harshit Agrawal heads digital marketing for Muthoot Pappachan Group from its head quarter based in Kochi, India. He has managed digital marketing & activations for brands such as Maruti Suzuki, Hero MotoCorp, Bharti Airtel, Google, Mankind Pharma...read more

Enquire Now

Send us your query

By choosing the options I authorize Muthoot Fincorp Limited and other Muthoot Pappachan Group companies (including its Agents/representatives) to communicate with me on their product offering, promotions & services through Telephone, Mobile, SMS, WhatsApp & Email.

Related Posts

Sprite Image

Beware of fraudulent job consultants

It has been brought to our notice that certain individuals are receiving fraudulent emails, phone calls, and messages, etc, about job vacancies with Muthoot FinCorp and they are also being asked to deposit money in certain bank accounts.

Please be informed that such communications and practices are completely mala fide and sent with an intent to defraud the public and bring disrepute to the goodwill of our Company. Our Company does not ever demand any fee/money against recruitment nor for the application/interview process.

The public at large is hereby cautioned not to be misled by any such communications received through emails, message or any other communication mode.

Please contact us for further information about the genuineness or otherwise of such communications at:

Muthoot FinCorp Ltd.

MG Road, Near Spencer's, Trivandrum - 695 039

Phone: 0471 4911550 / 0471 4911430

Email: [email protected]

172.69.62.203