Muthoot Finance to raise Rs 500 crore through secured redeemable NCDs

Basic issue size is Rs 100 cr, with Rs 400 cr green shoe; open between Feb 8 and March 3 with listing on BSE

Muthoot Finance Ltd is planning to raise around Rs 500 crore through public issue of secured redeemable non-convertible debentures (Secured NCDs) of the face value of Rs 1,000 each.

The issue comes with a base size of Rs 100 crore with an option to retain oversubscription up to Rs 400 crore, aggregating up to a tranche limit of Rs 500 crore, the company said in a statement on Tuesday. The issue will open on February 8 and close on March 3, with an option to close on such an earlier date or an extended date as may be decided by the Board of Directors or NCD committee.

The secured NCDs proposed under this issue have been rated AA+ (Stable) by Icra. The rating points to a “high degree of safety regarding timely servicing of financial obligations”, it said. The NCDs are proposed to be listed on BSE and allotment will be on a first-come-first-served basis.

There are seven investment options for secured NCDs, with ‘monthly’ or ‘annual’ interest payment frequency, or ‘on-maturity redemption’ payments. The interest rate is in the range of 8.25-8.26 per cent per annum for individual investors.

The funds raised will be used mainly for the firm's lending activities. The lead manager to the issue is AK Capital Services. IDBI Trusteeship Services is the debenture trustee and Link Intime India is the Registrar to the issue.