Muthoot Finance Limited NCD: Everything you need to know

11 Jan 2024 , 10:32 AM

Established in 1997, Muthoot Finance Limited is a non-banking financial company (NBFC) based in Kerala, known for its 800-year family business legacy.

The firm provides various financial services, including gold loans, housing finance (home loans), personal loans, insurance, gold coins, money transfer services, foreign exchange, mutual funds, microfinance, and vehicle loans.

With a widespread presence, Muthoot Finance operates over 4,745 branches across 22 states, the national capital territory of Delhi, and six union territories in India. The company boasts a dedicated workforce of 28,097 employees. As of September 30, 2023, Muthoot Finance's Gold Loan portfolio consisted of around 8.52 million loan accounts.

The company is launching debt offer, and the subscription period for this offer will be from January 8 to January 19, 2023. Click here to apply in the Muthoot Finance Limited NCD. 

The company is raising Rs 100 crore from the issue at a price of Rs 1000 each. Investors need to apply for a minimum of 10 NCDs in a lot. The company has received rating of [ICRA] AA+/Stable by ICRA Limited.

The company will use the net proceeds from the issue for the purpose of lending and other general corporate purposes.

Muthoot Fincorp Limited has allotted 5% to institutional investors, 30% each to non-institutional investors and HNI investors and 35% to retail investors. 

These NCDs have tenures of 24, 36, and 60 Months. It offers coupon rates from 8.25% to 8.50% based on the selection of investors. The frequency of interest payments will be monthly, annually or cumulative basis. Allotment of these NCDs will be in dematerialized mode only. Application is to be made through ASBA mode only.

Check the coupon rates of NCDs of Muthoot Finance Limited:

#	Series 1	Series 2	Series 3	Series 4	Series 5	Series 6	Series 7
Frequency of Interest Payment	Monthly	Monthly	Annual	Annual	Annual	NA	NA
Nature	Secured	Secured	Secured	Secured	Secured	Secured	Secured
Tenor	36 Months	60 Months	24 Months	36 Months	60 Months	36 Months	60 Months
Coupon (% per Annum)	8.25%	8.25%	8.25%	8.50%	8.50%	NA	NA
Effective Yield (% per Annum)	8.75%	8.75%	8.75%	9.00%	9.00%	9.00%	9.00%
Amount on Maturity (In Rs.)	Rs 1,000.00	Rs 1,000.00	Rs 1,000.00	Rs 1,000.00	Rs 1,000.00	Rs 1,295.03	Rs 1,538.62

 

RHP:

https://www.bseindia.com/downloads/ipo/Tranche%20III%20Prospectus_040120241721.pdf

Tax implications:

• Interest on debentures received by resident debenture holders would be subject to tax at the normal rates of tax in accordance with and subject to the provisions of the I.T. Act.
• As per section 2(29AA) read with section 2(42A) of the I.T. Act, a listed debenture is treated as a longterm capital asset if the same is held for more than 12 months immediately preceding the date of its transfer.
• As per section 2(42A) of the I.T. Act, a listed debenture is treated as a short-term capital asset if the same is held for not more than 12 months immediately preceding the date of its transfer.
• In case debentures are held as stock in trade, the income on transfer of debentures would be taxed as business income or loss in accordance with and subject to the provisions of the I.T. Act.
• Income tax is deductible at source on interest on debentures, payable to resident debenture holders at the time of credit/ payment as per the provisions of section 193 of the I.T. Act.

Muthoot Finance Limited NCD is managed by AK Capital Services Limited. Link Intime India is the registrar of NCD and Idbi Trusteeship Services Ltd.is debenture trustee to the same.