Muthoot Finance Limited NCD: A comprehensive guide to essential details

20 Sep 2023 , 02:02 PM

Muthoot Finance Limited is a Kerala-based gold loan NBFC company with a legacy of 800 years of the family business. The company offers Gold loans, Housing Finance (Home Loans), Personal loans, Insurance, Gold Coins, Money Transfer Services, Foreign Exchange, Mutual Funds, Micro Finance and Vehicle loans. Muthoot Finance has over 4,742 branches across 22 states, the national capital territory of Delhi, and six union territories in India, with 27,701 employees. It is coming up with a debt offer which is starting for subscription from September 21 to October 6, 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 NCD has received rating of [ICRA] AA-/Stable by ICRA.

Muthoot Finance Ltd has reserved 5% quota for institutional investors, 20% for non-institutional investors, 25% for High Networth Investors and 50% for retail investors.

The company will use the net proceeds from the issue for working capital requirements and for other general corporate purposes.

These NCDs have tenures of 24 months, 36 months, and 60 months. It offers coupon rates from 7.75% to 8.00% based on the selection of investors. The frequency of interest payments will be Monthly or Annual as per the choice of investors. 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 NCD September 2023 Tranche II 

	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)	7.75%	7.75%	7.75%	8.00%	8.00%	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 1,259.71	Rs 1,469.33

 

RHP:

https://www.sebi.gov.in/sebi_data/attachdocs/sep-2023/1694497166074.pd

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 NCD is managed by A. K. Capital Services Limited. Link Intime India Pvt Ltd is the registrar of NCD and IDBI Trusteeship Services Limited is debenture trustee to the same.