About Muthoot Finance Ltd
Muthoot Finance Ltd is a NBFC incorporated in 1997 primarily provides loan against household used jewellery and offers other products and services like money transfer, insurance, securities, foreign exchange, vehicle and asset finance services. Gold loans account for 99% of Muthoot’s assets under management with predominant exposure to South India.
The company plans for a public issue of secured, redeemable, non-convertible debentures (NCDs) of face value of Rs 1,000 each aggregating upto Rs 500 crore with an option to retain over subscription up to Rs 500 crore, aggregating to a total of upto Rs 1,000 crore.
Objective of the issue:
The funds raised through this Issue will be utilised for various financing activities including lending and investments, to repay existing liabilities or loans and towards business operations including capital expenditure and working capital requirements, after meeting the expenditures of and related to the issue and subject to applicable statutory/regulatory requirements.
Issue Open: Aug 23 2011
Issue Close: Sept 05 2011
There are 3 options through which investment can be made in Muthoot Finance NCD as described in the picture below.
The NCDs under this issue have been rated as AA -/Stable by CRISIL and ICRA. The rating indicates a high degree of safety with regard to timely servicing of financial obligations on the NCDs and such instruments carry a very low credit risk.
Why Invest in Muthoot Finance NCD
The interest rate of 12-12.25% is being offered to individuals for duration of 2 years, 3 years, as well as 5 years is an attractive opportunity when compared to bank deposits which offer interest rate ranging 10-10.5%. Unlike bank deposits there is no TDS for the interest rate payments. These are secured instruments and hence backed by assets of the company. The NCDs will be listed in the BSE and NSE hence there is a chance for capital appreciation in case the RBI starts reducing interest rates after some month.
How to apply to Muthoot Finance NCD?
You can download the forms from http://www.karvy.com/v2/
All Application Forms duly completed together with cheque/bank draft for the amount payable on application must be delivered before the closing of the subscription list to any of the Bankers to the Public Issue or collection centre(s)/agent(s). These addresses and names are available on the downloaded forms.