Muthoot Fincorp Limited NCD: A comprehensive guide to essential details

4 Sep 2023 , 11:38 AM

Muthoot Fincorp Limited operates as a non-deposit-taking Non-Banking Financial Company (NBFC) with a core focus on providing secured loans for personal and business needs. The company’s primary lending service revolves around extending credit against the security of gold ornaments and jewelry. These gold-backed loans are tailored to cater to the short-term financial liquidity needs of both individuals and businesses. It is coming up with a debt offer which is starting for subscription from September 1 to September 14, 2023. Click here to apply in the Muthoot Finance Limited NCD. 

The company is raising Rs 400 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 Fincorp Ltd has reserved 5% quota for institutional investors, 35% for non-institutional investors, and 60% 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, 60 months and 96 months. It offers coupon rates from 8.65% to 9.44% based on the selection of investors. The frequency of interest payments will be Monthly, Annual or Cumulative 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 Fincorp NCD September 2023 Tranche I 

#	Series 1	Series 2	Series 3	Series 4	Series 5	Series 6	Series 7	Series 8	Series 9	Series 10
Frequency of Interest Payment	Monthly	Monthly	Monthly	Annual	Annual	Annual	Cumulative	Cumulative	Cumulative	Cumulative
Nature	Secured	Secured	Secured	Secured	Secured	Secured	Secured	Secured	Secured	Secured
Tenor	24 Months	36 Months	60 Months	24 Months	36 Months	60 Months	24 Months	36 Months	60 Months	96 Months
Coupon (% per Annum)	8.65%	8.90%	9.05%	9.00%	9.27%	9.44%	NA	NA	NA	NA
Effective Yield (% per Annum)	8.99%	9.26%	9.43%	8.99%	9.26%	9.43%	8.99%	9.26%	9.43%	9.05%
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 1,000.00	Rs 1,188.00	Rs 1,305.00	Rs 1,570.00	Rs 2,001.00

 

RHP:

https://www.smccapitals.com/uploads/offerdocuments/9990.muthoot-fincorp-limited—tranche-i-prospectus—23-august-2023.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 Fincorp NCD is managed by SMC Capitals Limited. Integrated Registry Management Services Private Limited is the registrar of NCD and Vardhman Trusteeship Private Limited is debenture trustee to the same.