Muthoot Finance stock gains as NCD issue opens

On Thursday, Muthoot Finance Ltd informed the exchanges that it is issuing Non-Convertible Debentures (NCDs) on September 27, 2019, in an aim to raise around Rs. 1000 crore. The stock of Muthoot Finance jumped more than 2 per cent intraday in BSE.

The lender announced its 21st series of Public Issue of Secured Redeemable NCDs is with a base issue size of Rs. 100 crores, along with an option to retain oversubscription upto Rs. 900 crores aggregating upto tranche limit of Rs. 1000 crores ("Tranche III issue").

The company has mentioned that the issue opens on September 27, 2019 and closes on October 25, 2019 with an option to close on such earlier date or extended date as may be decided by the Board of directors or NCD committee. The NCDs are proposed to be listed on BSE. The allotment is based on first come first serve basis.

There are ten investment options for Secured NCDs with 'Monthly' or 'Annual' interest payment frequency or 'on maturity redemption' payments with effective yield p.a. ranging from 9.25 per cent to 10.00 per cent.

Mr.George Alexander Muthoot, Managing Director, Muthoot Finance, said "The issue will help the company to have long term funds and diversify borrowing basket as well. The previous NCD issues were well received in the market and were over-subscribed.

He further added, "It provides an opportunity to Retail and High Networth Individual investors, to whom we have allocated 80 per cent of the total issue size, with stable and attractive long term returns when there are only limited comparable alternative avenues for investments."

The issue is rated by two Credit Rating Agencies - CRISIL Ltd and ICRA Ltd. Both agencies have awarded long term debt rating of 'AA/Stable' for the debentures offered under the issue.

The Lead Managers to the issue are Edelweiss Financial Services Limited and A. K. Capital Services Limited. IDBI Trusteeship Services Limited is the Debenture Trustee for the issue. Link Intime India Private Limited is the Registrar to the Issue.

On Friday, the shares of Muthoot Finance opened in BSE at Rs. 685.00 as compared to the previous close of Rs. 682.10. The stock hit an intraday high of Rs. 697.70 and intraday low of 681.00.