IPO party is set to continue in April.
The IPO market momentum is set to accelerate this year! You might want to sit down for this one. Too good if you already are. Don’t miss the wholesome investment opportunities. MUTHOOT FINANCE LIMITED is all set to open the gates for investors for IPO bidding on the 7th of April this year.
The social unit, which is among the top seven finance conglomerates of India, will offer a breezy online IPO process through its trading website, based on the UPI payment gateway. If that wasn’t enough, the Muthoot Finance Limited NCD IPO has been rated ICRA AA+/Stable and comes with up to 8.00% percent annual interest and tenure of up to 120 month
About the NCD Issue (company stats, standings, etc.)
| Issuer | Muthoot Finance Limited |
|---|---|
| Type of instrument | Secured, Redeemable, Non-Convertible Debenture |
| Listing | Bombay Stock Exchange Limited |
| Issue Size | Public Issue by the Company of secured redeemable non-convertible debentures of the face value of ₹ 1,000 each for an amount of ₹ 1,000 million with an option to retain oversubscription up to ₹4,000 million aggregating up to 50,00,000 NCDs amounting to ₹ 5,000 million. |
| Issue Price | Rs. 1000 per NCD |
| Minimum Investment | Rs. 10,000 |
| Issue Opening Date | Thursday, April 07, 2022 |
| Issue Closing Date | Thursday, April 28, 2022, * *Issue may close on such earlier date or an extended date as may be decided by the Board of Directors of the Company or Securities Issuance Committee thereof. |
| Mode of Issuance | Dematerialized only |
| Allotment | First come, first serve basis only |
ISSUE STRUCTURE
| Series | I | II | III | IV | V | VI | VII | VIII |
| Frequency of Interest payment | Monthly | Monthly | Annually | Annually | Annually | Annually | NA | NA |
| Minimum Application | Rs 10000 (10 NCDs) across all Series | |||||||
| Face Value/Issue Price | Rs 1000 | |||||||
| In multiples of thereafter | Rs 10000 (1 NCD) | |||||||
| Tenure | 36 Months | 60 Months | 36 Months | 60 Months | 84 Months | 120 Months | 36 Months | 60 Months |
| Coupon (%per annum) for NCD Holders in Category 1, 2, 3, & 4 | 6.50% | 6.75% | 6.75% | 7.00% | 7.25% | 7.50% | NA | NA |
| Additonal Interest For Category 3 & 4 | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | NA | NA |
| Additional Incentive On Base Coupon Rate (% Per Annum) On Any Record Date As Applicable To Category III And Category IV Investors | ||||||||
| Effective Yield (Per Annum) For NCD Holders 1 & 2 | 6.50% | 6.75% | 6.75% | 7.00% | 7.25% | 7.50% | 6.75% | 7.00% |
| Effective Yield (Per Annum) For NCD Holders 3 & 4 | 7.00% | 7.25% | 7.25% | 7.50% | 7.75% | 8.00% | 7.25% | 7.50% |
| Mode of Interest Payment | Through various options availabe | |||||||
| Amount (NCD)On Maturity for NCD Holders For 3 & 4 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,233.65 | 1,435.63 |
| Maturity / Redemption Date (years from the Deemed date of Allotment) | 36 Months | 60 Months | 36 Months | 60 Months | 84 Months | 120 Months | 36 Months | 60 Months |
| Put And Call Option | NA | NA | NA | NA | NA | NA | NA | NA |
Financial Performance (Rs. Crores)
About the Muthoot Finance Limited Compan
Muthoot Finance Limited (MFL) is the flagship company of the Kerala-based business house, It has diversified operations in financial services, healthcare, education, and hospitality. MFL was incorporated in 1997 and is India’s largest gold loan focussed NBFC with total loan assets (standalone) of Rs. 54,688 crore and 4,617 branches as of December 31, 2021. The company derives a major portion of its business from South India (50% of the total gold loan portfolio as of December 31, 2021), where gold loans have traditionally been accepted as a means of availing short-term credit, although it has increased its presence beyond South India over the last few years.
MFL reported a standalone net profit of Rs. 2,994 crores on an asset base of Rs. 66,831 crores in 9M FY2022 against a net profit of Rs. 3,722 crores on an asset base of Rs. 63,465 crores in FY2021. The consolidated portfolio stood at Rs. 60,896 crores as of December 31, 2021, compared to Rs. 58,280 crores as of March 31, 2021 (Rs. 46,871 crores as of March 31, 2020), of which gold, housing, and microfinance accounted for 90%, 3%, and 6%, respectively.
Key Strengths
- Established franchise and leadership position in the gold loan segment
The company has a track record of around two decades in the gold loan business and is India’s largest gold loan focussed non-banking financial company (NBFC) with a total portfolio of Rs. 54,688 crores (of which 99% is a gold loan) as of December 31, 2021; the portfolio grew by 8.5% on a year-on-year (YoY) basis. The consolidated portfolio stood at Rs. 60,896 crores in December 2021 compared to Rs. 55,800 crores in December 2020, of which gold, microfinance, and housing accounted for 90%, 6%, and 3%, respectively. As of December 31, 2021, the company has an extensive pan-India network of 4,617 branches; 60% of its branches are in South India, where it has an established franchise.
- Track record of healthy earnings performance
The company’s consolidated net profit remained healthy with the annualized PAT/AMA at 5.7% in 9M FY2022 and 6.1% in FY2021 (6.5% in FY2020). The consolidated net profit remained in the range of 5.5-6.5% between FY2018 and 9M FY2022. The annualized net interest margin was lower in 9M FY2022 and FY2021 at 10.7% and 11.4%, respectively, vis-à-vis ~13% and 12.9% in FY2020 and FY2019, respectively, because of the higher on-balance sheet liquidity as well as the reduction in loan yields.
- Capitalization to remain comfortable over the medium term
The Company has a comfortable capitalization profile with a standalone gearing of 2.8 times and 3.1 times as of December 31, 2021, and March 31, 2021 (3.2 times as of March 31, 2020), respectively, aided by good internal capital generation. The consolidated managed gearing stood at 3.0 times as of December 2021. The company’s standalone net worth was Rs. 17,412.2 crores as of December 31, 2021 (Rs. 15,238.9 crores as of March 31, 2021). The company is expected to be comfortably placed to meet the medium-term capital requirements of its subsidiaries without affecting its capital structure.
Credit Risks
- Performance of non-gold segments to remain monitorable; sizeable share of gold loans would support overall portfolio quality
The Company’s standalone portfolio almost entirely consists of gold loans and it has diversified its exposure via its subsidiaries, namely Belstar Microfinance Limited (Belstar; microfinance), Muthoot Homefin (India) Limited (MHL; affordable housing), and Muthoot Money Limited (MML; vehicle finance). The consolidated portfolio is currently concentrated on gold loans, comprising 90% of the loan book while microfinance, affordable housing, and vehicle finance accounted for 6.3%, 2.6%, and 0.4%, respectively, as of December 31, 2021.
- Operations concentrated in South India
The Company’s operations are largely concentrated in South India, which constituted 60% of its total branch network and 50% of its total gold loan portfolio as of December 31, 2021. Although the share of the portfolio in South India has reduced from 57% in March 2015. Geographical diversification is expected to improve steadily over the medium to long term with an improvement in the scale of the gold loan portfolio and the stabilization of the performance of the non-gold asset segments.
How to invest in Muthoot Finance Limited NCD IPO April 2022
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Place your bid in three simple steps
| Key in Basic Details> | Choose the IPO Series> | Place the bid |
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How to invest in Muthoot Finance Limited NCD IPO April 2022?
The application process on the Bonds India platform is simple and seamless.
- Click on Apply Now on Muthoot Finance Limited NCD IPO Page.
- Fill in the Application form with the basic details such as name, email address, mobile number, Pan details, bank, and Demat details).
- Then, confirm the quantity and price and select a payment method.
- That’s all folks bidding complete!