Muthoot FinCorp to offer NCD yielding 9.75% for 8 years; subscription window open till January 25

Muthoot FinCorp Limited has announced XVI Tranche III series of secured, redeemable, non-convertible debentures (NCDs) to raise up to Rs 300 crore, which is within the issue size of Rs 1,100 crore.

The third tranche amounts to Rs 75 crore, with a green-shoe option of Rs 225 crore, aggregating up to Rs 300 crore (Tranche III Issue). The Tranche III Issue, with a face value of Rs 1,000 for each NCD, will be open to public from January 12 to January 25, subject to an early closure as may be approved by its board of directors, and subject to relevant approvals, following the Regulation 33A of the Securities and Exchange Board of India (Issue And Listing Of Non-Convertible Securities) Regulations, 2021.

The NCDs under the Tranche III Issue are being offered with maturity/tenure options of 24 months, 36 months, 60 months, and 96 months with monthly, annual, and cumulative payment options across options I, II, III, IV, V, VI, VII, VIII, IX and X from which the customers can conveniently choose.

While option X is restricted to Rs 50 crore, the effective yield (per annum) for the NCD holders in all categories of investors ranges from 9.26 to 9.75 per cent. The secured NCDs issued under Tranche III have been rated at AA-/ Stable by CRISIL and are proposed to be listed on the debt market segment of BSE.

Key Summary

• How much interest will the NCD pay? - 9.26 % to 9.75 %.
• What are the ratings for the Muthoot FinCorp NCD? - AA-/ Stable by CRISIL
• How will interest be paid? Through electronic mode
• How to apply? Investors can apply through various options, including Net banking with self-certified Syndicate banks, UPI, Syndicate Bank ASBA, Direct ASBA, and through the websites of the issuer, lead manager and BSE Limited.
• Is there a premature exit? N0
• Is the interest taxable? Yes
• Are there any tax benefits for investing in the NCDs? NIL

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“This is the third in the XVI series of NCDs that we are issuing; both our existing and prospective customers can either visit any of our 3600+ branches across India or log in to our mobile app – Muthoot FinCorp ONE, to invest in the NCDs.  With a CRISIL rating of AA-/Stable, we expect a good response to this issue and propose using the funds for onward lending activities,” said Shaji Varghese, CEO of Muthoot FinCorp Limited.

There is no premature exit. But you can sell the NCDs on the NSE or BSE with enough liquidity. Unlike the traditional section 54 EC bonds, which give exemption from capital gains, this particular issue of NCDs has no tax benefits.