Muthoot Finance Ltd. Launches 4th NCD issue-By Sachin Murdeshwar

 

Muthoot Finance Ltd. Launches 4th NCD issue

L- R – Sunny Mirchandani (AK Capital), OomenK Mammen (CFO, Muthoot Finance),
George Alexander Muthoot( MD, MuthootFinance), Sandeep Mahajan (RR Investors),
Ajay Saraf (ICICI Securities)

Mumbai,September 11, 2012(Sachin Murdeshwar):Muthoot Finance Limited, the largest gold financing company in India in termsof loan portfolio according to the IMaCS Research & Analytics IndustryReports, Gold Loans Market in India, 2009 [“IMaCS Industry Report, (2010Update)], will open on September 17, 2012, a public issue of secured,redeemable, non-convertible debentures (“NCDs”) of face value of Rs.1,000 each aggregating upto Rs. 250 Crores with an option to retainoversubscription upto Rs. 250 Crores, aggregating to a total of upto Rs. 500Crores (the “Issue”).

TheNCD Issue with five investment options and effective yield of upto 12.40% (perannum) closes on October 05, 2012, with an option for early closure as may bedecided by the NCD Public Issue Committee subject to necessary approvals. Theface value of each NCD is Rs. 1,000 and the minimum application is for ten NCDs(Rs. 10,000) (forall options of NCDs, namely Option I, Option II, Option III, Option IV andOption V either taken individually or collectively) and in multiples of one NCD thereafter.

TheNCDs offered through the Prospectus are proposed to be listed on BSE Limitedand National Stock Exchange of India Limited.

TheNCDs proposed to be issued under this Issue have been rated 'CRISIL AA-/Stable'by CRISIL and '[ICRA] AA- /Stable' by ICRA for an amount of upto Rs. 500Crores.

 

Thereare five investment options:

OptionI: The maturitydate is 24 months from the deemed date of allotment and the interest is payableannually. The coupon rate and effective yield is 11.50% p.a. for NCD Holders inCategory I, Category II and Category III.

OptionII: The maturitydate is 36 months from the deemed date of allotment and the interest is payableannually. The coupon rate and effective yield is 11.75% p.a. for NCD Holders inCategory I, Category II and Category III.

OptionIII: The maturitydate is 60 months from the deemed date of allotment and the interest is payablemonthly. The coupon rate is 11.75% and effective yield is 12.40 % p.a. for NCDHolders in Category I, Category II and Category III.

OptionIV: The maturitydate is 60 months from the deemed date of allotment and the interest is payableannually. The coupon rate and effective yield is 12.00% p.a. for NCD Holders inCategory I, Category II and Category III.

OptionV: The maturitydate is 72 months from the deemed date of allotment and effective yield is12.25% p.a. and investment amount doubles in 6 years for NCD Holders inCategory I, Category II and Category III.

Thefunds raised through this Issue will be utilised by the Company for variousfinancing activities including lending and investments, to repay existingliabilities or loans and towards business operations including for capitalexpenditure, working capital requirement and other general corporate purposes,after meeting the expenditures of and related to the Issue and subject toapplicable statutory/regulatory requirements.

TheCompany provides personal and business loans secured by gold jewellery, or goldloans, primarily to individuals who possess gold jewellery but could not accessformal credit within a reasonable time, or to whom credit may not be availableat all, to meet unanticipated or other short-term liquidity requirements. As ofJune 30, 2012, the Company has branch network of 3,780 branches. The Company’sGold Loan portfolio as of March 31, 2012 comprised approximately 6 million loanaccounts. As of June 30, 2012, it employed 25,103 persons in its operations.

TheLead Managers to the Issue are ICICI Securities Limited, A.K.Capital ServicesLimited, Edelweiss Financial Services Limited, Karvy Investor Services Limited,RR Investors Capital Services (P) Limited and SBI Capital Markets Limited.

Disclaimer:Muthoot FinanceLimited, is proposing, subject to market conditions and other considerations,to make a public issue of securities and has filed a Draft Prospectus with theSecurities and Exchange Board of India (“SEBI”), BSE Limited and theNational Stock Exchange of India Limited (“NSE”) and the Prospectus withthe Registrar of Companies, Kerala and Lakshadweep (“RoC”), SEBI, BSELimited and the NSE.  The Draft Prospectus and Prospectus are available onthe website of SEBI at www.sebi.gov.in, BSE Limited at www.bseindia.com,National Stock Exchange of India Ltd. at www.nseindia.com,the Company at www.muthootfinance.comand the respective websites of the Lead Managers, at www.icicisecurities.com, www.akcapindia.com,www.edelweissfin.com, www.karvy.com, www.rrfcl.com and  www.sbicaps.com related to theIssue.  All investors proposing to participate in the Issue should investonly on the basis of the information contained in the Prospectus (including therisk factors therein) dated September 09, 2012, filed with the RoC.