10.1% Muthoot Fincorp NCD – Oct-2024 – Issue Details and Review
Muthoot Fincorp Secured NCD Bonds Tranche II would open for subscription on October 11, 2024. Muthoot Fincorp Limited is a leading NBFC company which has emerged as a prominent gold loan player in India. It offers interest rates up to 10.1%. These NCD’s are issued in 13 different series and for 24 months to 92 months tenure. Interest is paid either monthly, Annual or cumulative depending on the option chosen. Should you invest in Muthoot Fincorp NCDs of October, 2024 issue? What are the risk factors one should consider before investing in such high risk NCDs?
About Muthoot Fincorp Limited
They are, a non-deposit taking, systemically important NBFC registered with the RBI.
Company is one of the prominent gold loan players in the Indian market. The personal and business loans secured by gold jewelry and ornaments offered by the Company are structured to serve the business and personal purposes of individuals who do not have ready or timely access to formal credit or to whom credit may not be available at all, to meet unanticipated or other short-term liquidity requirements.
Muthoot Fincorp NCD – Oct-2024 Issue Details
Subscription opening Date
11-Oct-24
Subscription closure Date
24-Oct-24
Issuing Security Name
Muthoot Fincorp Limited
Security Type
Secured, Redeemable and Non-Convertible NCDs
Issue Size (Base)
Rs 75 Crores
Issue Size (Option to retain over subscription)
Rs 175 Crores
Total issue size
Rs 250 Crores
Issue price
Rs 1,000 per bond
Face value
Rs 1,000 per bond
Series
I to XIII
Minimum Lot size
10 bonds and 1 bond there after
Tenure
26, 36, 60, 72, and 92 Months
Interest Payment frequency
Monthly, Annual and Cumulative
Listing on
Within 6 working days on BSE
Lead Manager
Nuvama Wealth Management Limited
Debenture Trustee/s
Vardhman Trusteeship Private Limited
What are Muthoot Fincorp NCD Interest Rates?
Series
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
XIII
Frequency of Interest Payment
Monthly
Monthly
Monthly
Monthly
Annual
Annual
Annual
Annual
Cumulative
Cumulative
Cumulative
Cumulative
Cumulative
Tenure (months)
24
36
60
72
24
36
60
72
24
36
60
72
92
Coupon (% per Annum)
9.00%
9.25%
9.45%
9.65%
9.40%
9.65%
9.90%
10.10%
NA
NA
NA
NA
NA
Effective Yield (% per Annum)
9.38%
9.65%
9.87%
10.09%
9.40%
9.65%
9.89%
10.10%
9.40%
9.65%
9.90%
10.10%
9.50%
Amount on Maturity (In Rs.)
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,197
1,318
1,604
1,782
2,006
What are the Muthoot Fincorp NCD ratings?
These secured NCD’s are rated as AA-/Stable by CRISIL which indicate that instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations and carry very low credit risk.
How is the company doing in terms of profits?
Its consolidated profits are as below:
Year ended Mar-2019 – 372.6 Crores
Year ended Mar-2020 – 257.9 Crores
Year ended Mar-2021 – 397.2 Crores
Year ended Mar-2022 – 412.55 Crores
Year ended Mar-2023 – 646.42 Crores
Year ended Mar-2024 – 1,047.98 Crores
Also Read: Edelweiss Financial Services NCD Oct-2024 offers 11% Interest Rates
Why to invest in Muthoot Fincorp NCD?
These NCDs offer high interest rates, which range between 9.0% to 10.1% and yield between 9.38% to 10.1%.
These are secured NCDs. If the company gets shut down or get into financial crisis for some reason, NCD investors would get preference in repayment of capital along with interest as those backed up by assets of the company. Hence, it is safe to invest in secured NCDs.
The company is earning consistent margins in the last few years. This indicates that this company has ability to consistently pay the interest amount for its NCD holders or payments to its creditors.
Why not to invest in Muthoot Fincorp NCD?
Here are the risk factors of investing in these non-convertible debenture bonds.
The Company has been subject to RBI inspections and any adverse action taken could affect the business and operations of the company.
Company business requires substantial capital, any disruption in funding sources can have an impact on company business.
Company credit ratings can change any time which can affect the trading price of its NCDs.
Company financial performance is particularly vulnerable to interest rate risk.
Refer to the Muthoot Fincorp NCD Oct-24 Prospectus for complete risk factors.
Should you invest in Muthoot Fincorp NCD – Oct-2024 issue?
Muthoot Fincorp offers secured NCDs in this issue. These NCDs offer high interest rate up to 10.1%. These NCDs have good credit rating of AA-/Stable by CRISIL.
On the other side, one should understand the risks involved in investing in NCD bonds of NBFC companies. In the past, NBFC companies has been delaying/defaulted the payment of interest and repayment of capital.
High-risk investors can invest in these NCD bonds after understanding all these risk factors.
Suresh KP is the Founder of Myinvestmentideas. He is NISM Certified – Investment Adviser and NISM Certified – Research Analyst. He has been analyzing financial markets in the last 20 years.He can be reached at suresh@myinvestmentideas.com Latest posts by Suresh KP (see all)
