Muthoot Finance NCD Investment – Latest issue dated Dec 22, 2011 – Jan 07, 2012
Muthoot Finance is the leading gold financing company in India. The Company provides personal and business loan against gold. This gold financing is provided essentially to those individuals who have gold jewelry and in spite of having it they are not able to get loans. Also the gold loans are given to those people who do not get credit during a prescribed time frame due to several reasons. The company has a branch network of 1605 branches and is considered as one of the largest NBFC’s among the provider of gold loans.
There are 4.1 million loan accounts of the company across India. The loan amounts are disbursed in the range of Rs. 2000 to Rs. 100,000 and the interest rates charged are at the rate of 12% to 30% p.a. The company provides various services like Gold Loans, Gold coins, Money transfer, And Foreign exchange etc. The Muthoot Finance NCD Investment has opened it issue on December 22, 2011 and open till Jan 07, 2012.
The Muthoot Finance Non Convertible Debentures Investment has been issued at a face value of Rs. 1000 per unit. The minimum investment required is Rs. 5000/- and further in the multiples of one bond. The investor gets three options for investment in the secured redeemable non convertible debentures. The return is as per the maturity of the debenture. The details of the three options for the investment are as follows:
- The Non convertible debentures for 24 months will attain maturity when it completes 24 months; which is calculated from the day of allotment. The investor can earn 11.75% interest at a coupon rate.
- The Non convertible debentures for 36 months will attain maturity the day it finishes 36 months from the date of allotment. The earning for the investor is 12% at coupon rate.
- The Non convertible debentures for 60 months will be matured when the time period of 60 months is completed from the time of allotment of debentures. The earning received for the investor is 12% at coupon rate.
The effective rate of return in Muthoot Finance NCD Investment the investor (individual, corporate and HUF investors) gets for the 1st option is approximately around 12% and for the second and the third option the rate of return is around 12.25%.
The gold loan portfolio of the company as per the records of March 2011 consisted of 47 lakhs of loan accounts which are catered through 2733 branches across India. With the issue of Muthoot Finance NCD Investment the company is planning to collect an amount of Rs. 500 crores. This money is supposed to be utilized for diverse financing activities like lending and investments, repayment of existing liabilities and also to make up for the working capital requirements.
The experts have commented that the yield from the debentures would be good because in the present scenario the company is making good profits. It has been consistently making profits since past few years and hence one can invest in the bonds without much fear.
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