Muthoot Finance, a frequent visitor to capital market with its debt offer is coming out with its 2nd offer this year and 10th in the last four years.

The company is aiming to raise total Rs. 400 crore via this offer that is of a base size of Rs. 200 crore with a green shoe option to retain 100 per cent oversubscription. Funds so raised will be used for lending.

The offer is of Secured Non Convertible Debentures having face value of Rs. 1000 each and a coupon rate ranging from 10 to 10.75 per cent and having tenure of 400 days, 24 months, 36 months and 60 months.

The company is offering 0.75 per cent extra incentives to select investors and thus this offer are giving yield between 10.75 to 11.50%.

Minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD thereon, thereafter.

The offer is available in demat as well as physical mode, but trading will take place only in demat mode. Issue opens for subscription on August 18 and will close on or before September 18 depending on response. Post allotment these NCDs will be listed on BSE.

The issue is lead managed by ICICI Securities Ltd and Link Intime India Pvt. Ltd. is the registrar to the offer. IDBI Trusteeship Services Ltd is the Debenture trustee.

ICRA has assigned ICRA AA-/stable indicating at high degree of safety regarding timely servicing of financial obligations.

This NBFC Company primarily engaged in gold loan and has suffered a setback for the fiscal 2014 with lower top and bottom lines. Post this issue company’s debt equity ratio will be at 4.67 which are alarming. Considering this, the issue is not worth.

Remarks: Not worth

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