NEW DELHI: Non-banking finance company (NBFC) Muthoot Fincorp Ltd has launched a non-convertible debenture (NCDs) issue, which will offer effective yield in the range of 8.57-10.20%. The public issue of unsecured as well as the secured NCDs will be open for subscription from 30 September to 26 October.
The base size of the issue is Rs200 crore with a greenshoe option to raise it to ₹400 crore.
The issue has been rated A+ with a stable outlook by Crisil Ltd. As per experts, these ratings mean that the debentures carry low credit risk but are not as safe as AAA-rated instruments.
Moreover, a part of the issue has been secured against all loan receivables, both present and future, of the company.
Investors can lock in money for a period of 27, 38, 60, 72 and 87 months in these NCDs, which are proposed to be listed on the BSE. The secured portion of the NCD will come in tenures of 27, 38 and 60 months, while the unsecured NCD will be available in tenures of 72 and 87 months.
The maximum effective yield payout in the secured portion will be 9.10% for a tenure of 60 months, while it will highest of 10.20% for the unsecured portion in 87 months.
According to experts, unsecured NCDs are much riskier than the secured NCDs as the bonds are backed by the company’s assets.
The NCD has a face value of ₹1,000 with a minimum application size of ₹10,000, and in multiples of one NCD, thereafter.
The funds raised through the issue will be used for the purpose of working capital and general corporate purposes.
The NBFC has been engaged in the gold loans business for over a decade and is headquartered in Kerala.
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