10% Muthoot Fincorp NCD – April-2024 – Issue Details and Review

Muthoot Fincorp Secured NCD Bonds Tranche IV would open for subscription on April 10, 2024. Muthoot Fincorp Limited is a leading NBFC company which has emerged as a prominent gold loan player in India. It offers interest rates up to 10%. These NCD’s are issued in 10 different series and for 26 months to 94 months tenure. Interest is paid either monthly, Annual or cumulative depending on the option chosen. Should you invest in Muthoot Fincorp NCD’s of April, 2024 issue series? What are the risk factors one should consider before investing in such high risk NCDs?

Also Read: Kosamattam Finance NCD April-2024 Issue Offers 10% Interest Rates

About Muthoot Fincorp Limited

They are, a non-deposit taking, systemically important NBFC registered with the RBI.

Company is one of the prominent gold loan players in the Indian market. The personal and business loans secured by gold jewelry and ornaments offered by the Company are structured to serve the business and personal purposes of individuals who do not have ready or timely access to formal credit or to whom credit may not be available at all, to meet unanticipated or other short-term liquidity requirements.

Muthoot Fincorp NCD – April-2024 Issue Details

Subscription opening Date 10-Apr-24
Subscription closure Date 25-Apr-24
Issuing Security Name Muthoot Fincorp Limited
Security Type Secured, Redeemable and Non-Convertible NCDs
Issue Size (Base) Rs 100 Crores
Issue Size (Option to retain over subscription) Rs 260 Crores
Total issue size Rs 360 Crores
Issue price Rs 1,000 per bond
Face value Rs 1,000 per bond
Series I to XIII
Minimum Lot size 10 bonds and 1 bond there after
Tenure 26, 38, 60, 72, and 94 Months
Interest Payment frequency Monthly, Annual and Cumulative
Listing on Within 6 working days on BSE
Lead Manager SMC Capitals Limited
Debenture Trustee/s Vardhman Trusteeship Private Limited

Muthoot Fincorp NCD April-2024 Prospectus link

What are Muthoot Fincorp NCD Interest Rates?

Series I II III IV V VI VII VIII IX X XI XII XIII
Frequency of Interest Payment Monthly Monthly Monthly Monthly Annual Annual Annual Annual Cumulative Cumulative Cumulative Cumulative Cumulative
Tenure (months) 26 38 60 72 26 38 60 72 26 38 60 72 94
Coupon (% per Annum) 8.90% 9.15% 9.35% 9.55% 9.25% 9.50% 9.75% 10.00% NA NA NA NA NA
Effective Yield (% per Annum) 9.26% 9.54% 9.75% 9.97% 9.27% 9.52% 9.74% 10.00% 9.27% 9.52% 9.74% 10.00% 9.25%
Amount on Maturity (In Rs.) 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,212 1,334 1,592 1,772 2,000

What are the Muthoot Fincorp NCD ratings?

These secured NCD’s are rated as AA-/Stable by CRISIL which indicate that instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations and carry very low credit risk.

How is the company doing in terms of profits?

Its consolidated profits are as below:

Year ended Mar-2019 – 372.6 Crores

Year ended Mar-2020 – 257.9 Crores

Year ended Mar-2021 – 397.2 Crores

Year ended Mar-2022 – 412.55 Crores

Year ended Mar-2023 – 646.42 Crores

Why to invest in Muthoot Fincorp NCD?

  • These NCDs offer high interest rates, which range between 8.9% to 10% and yield between 9.25% to 10%.
  • These are secured NCDs. If the company gets shut down or get into financial crisis for some reason, NCD investors would get preference in repayment of capital along with interest as those backed up by assets of the company. Hence, it is safe to invest in secured NCDs.
  • The company is earning consistent margins in the last few years. This indicates that this company has ability to consistently pay the interest amount for its NCD holders or payments to its creditors.

Why not to invest in Muthoot Fincorp NCD?

Here are the risk factors of investing in these non-convertible debenture bonds.

  • The Company has been subject to RBI inspections and any adverse action taken could affect the business and operations of the company.
  • Company business requires substantial capital, any disruption in funding sources can have an impact on company business.
  • Company financial performance is particularly vulnerable to interest rate risk.
  • Refer prospectus for complete risk factors.

You may like: 10.45% Edelweiss Financial Services NCD April-2024 Issue Details

Should you invest in Muthoot Fincorp NCD April-2024 issue?

  • Muthoot Fincorp offers secured NCDs in April, 2024 issue. These NCDs offer high interest rate up to 10%. These NCDs have good credit rating of AA-/Stable by CRISIL.
  • On the other side, one should understand the risks involved in investing in NCD bonds of NBFC companies. In the past, NBFC companies has been delaying/defaulted the payment of interest and repayment of capital.

High-risk investors can invest in these NCD bonds after understanding all these risk factors.

Suresh KP

Leave a Reply

Your email address will not be published. Required fields are marked *