Muthoot Fincorp Limited's Debenture offer opens today

2 Jan 2023 , 03:13 AM

Muthoot Fincorp is coming up with a debt offer which will be open for subscription between January 02 and January 27, 2023. Click here to apply in the Muthoot Fincorp Limited NCD.

Non-deposit-taking NBFC Muthoot Fincorp Limited is primarily engaged in the business of offering personal and business loans which are secured by gold ornaments and jewellery. The Gold loan portfolio of the Company as of September 30, 2022, comprised approximately 33.23 lakhs loan accounts.

The company is raising Rs 200 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 CRISIL AA-/Stable by CRISIL Ratings Limited for the NCDs.

Muthoot Fincorp Limited 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 fund working capital requirements and other corporate purposes.

These NCDs have tenures of 27 months, 38 months, 48 months, and 60 months. It offers coupon rates from 8.10% to 8.80% 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 Limited

	Series 1	Series 2	Series 3	Series 4	Series 5	Series 6	Series 7	Series 8
Frequency of Interest Payment	Monthly	Monthly	Monthly	Monthly	Annual	Annual	Cumulative	Cumulative
Nature	Secured
Tenor	27 Months	38 months	48 months	60 months	48 months	60 months	27 months	38 months
Coupon Rate	8.10%	8.25%	8.40%	8.50%	8.70%	8.80%	NA	NA
Effective Yield (% per Annum)	8.40%	8.56%	8.72%	8.83%	8.69%	8.79%	8.41%	8.57%
Amount on Maturity	Rs 1,000	Rs 1,000	Rs 1,000	Rs 1,000	Rs 1,000	Rs 1,000	Rs 1,199	Rs 1,297

RHP:

https://www.bseindia.com/downloads/ipo/Prospectus_301220220924.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 long-term 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.

On the financial performance front, for the last three fiscals, MFL has (on a consolidated basis) posted net profits of Rs. 257.93 crore (FY20), Rs. 397.28 crore (FY21) and Rs. 412.55 crore (FY22). Thus it has posted steady growth in its top and bottom lines during reported periods.

The issue is solely lead managed by SMC Capitals Ltd. while Integrated Registry Management Services Private Limited is the registrar of the issue and Vardhman Trusteeship Private Limited is the debenture trustee.