New Delhi: Non-Banking Finance Company (NBFC) Muthoot Fincorp Ltd. has issued a non-convertible debenture (NCD), which will offer an effective yield in the range of 8.57-10.20%. The public issue of unsecured and unsecured NCDs will be open for subscription from September 30 to October 26.
The base size of the issue is Rs 200 crore with greenshoe option to increase it ₹400 million.
The issue has been rated A+ by CRISIL Limited with a stable outlook. According to experts, these ratings mean that debentures carry less credit risk but are not as secure as AAA-rated instruments.
Further, a part of the issue is secured against all debt receivables of the company, both present and future.
Investors can lock money in these NCDs listed on BSE for tenors of 27, 38, 60, 72 and 87 months. The secured portion of NCDs will come with tenures of 27, 38 and 60 months, while the unsecured NCDs will be available in tenures of 72 and 87 months.
The maximum effective yield payout in the secured portion will be 9.10% for a tenure of 60 months, while it will be maximum 10.20% for the unsecured portion over 87 months.
According to experts, unsecured NCDs are more risky than secured NCDs as the bonds are backed by the assets of the company.
The face value of the NCD is ₹1,000 with minimum application size ₹10,000, and then in multiples of an NCD.
The amount raised through the issue will be used for working capital and general corporate purposes.
The NBFC is engaged in the gold loan business for more than a decade and is headquartered in Kerala.
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