Muthoot Finance Ltd has announced the launch of its 29th series of secured redeemable non-convertible debentures (NCD) with a face value of Rs 1,000 apiece.
The issuance provides a 7.75 per cent to 8.25 per cent rate of return to retail and high-net-worth individual investors. In comparison to the previous issue, the interest rate has been raised by 0.25 per cent – 0.35 per cent each year. ICRA rates the planned NCD issuance as AA+ (stable), indicating a high level of safety.
The issue has a Rs 75 crore base issue size with an option to retain over-subscription up to Rs 225 crore, for a total tranche limit of Rs 300 crore.
The issue is scheduled to begin on November 28 and end on December 19, with the option of closing on a much earlier or later date, as determined by the board of directors or NCD committee.
The NCDs would be listed on the Bombay Stock Exchange (BSE). The allocation will be done on a first-come, first-served basis.
Speaking about the NCD issue, George Alexander Muthoot, the managing director of Muthoot Finance Ltd, said, “We plan to utilise these funds in our primary lending activities. With the backdrop of the increase in interest rates by the Reserve Bank of India, we have also increased interest rates on NCDs offered in this issue by 0.25 per cent – 0.35 per cent pa for tenors of 2,3 and 5 years.
“We value the safety of our investors and assure them with our AA+/stable rating, coupled with an attractive rate of return of 7.75 per cent to 8.25 per cent pa. We expect that the issue will see good demand from investors,” he added.
AK Capital Services Ltd. is the issue’s lead manager. The issue’s debenture trustee is IDBI Trusteeship Services Limited. The issue’s registrar is Link Intime India Private Ltd.