IPO party set to continue into the new year
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 Fincorp Ltd NCD is all set to open the gates for investors for IPO bidding on the 5th of January 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 IPO has been rated A+ by the CRISIL (independent credit rating agency) and comes with up to 9.00 percent annual interest and tenure of up to 96 months. All you need to do is feed in your basic details, Bank account, and Demat details, the number of shares you need, and place your bid.
About the NCD Issue (Subscription date, Issue Size, etc.)
| Issuer | Muthoot Fincorp Limited |
|---|---|
| Type of instrument | Secured Redeemable Non-Convertible Debentures |
| Listing | Bombay Stock Exchange Limited |
| Issue Size | Base Issue of Rs. 200 Crore with an option to retain oversubscription up to Rs. 200 Crore aggregating to Rs. 400 Crore. |
| Credit Rating | “CRISIL AA/Stable” by CRISIL and BWR AA+/ Negative by Brickworks |
| Face Value | Rs. 1000 per NCD |
| Minimum Investment | Rs. 10,000 |
| Issue Opening Date | January 5, 2022 |
| Issue Closing Date | January 28, 2022 (*with an option of early closure) |
| Mode of Application | UPI and ABSA |
| Mode of Issuance | Dematerialized only |
| Allotment and allotment ratio | First come, first serve basis only Institutional 30%, Non-Institutional 10%, HNI 30%, Retail 30% |
About the Company
Products Offered
Gold Loan
Muthoot provides gold loans up to Rs 1 crore with loans up to 80% of the gold value for any purpose. The loan is processed within 30 minutes. Flexible repayment options are available.
Small Business Loan
Fuel your business with Muthoot Fincorp’s small business loans and achieve all your dreams as they come with flexible tenures, easy repayment options, and minimum documentation based on RBI guidelines. The criteria to avail of our Small Business Loan is simple and flexible with loans starting as low as Rs. 15,000.
Home Loan
Muthoot provides affordable housing loans to customers in the middle-income and lower-income categories. It offers low ticket loans with an extended repayment period, loans for the purchase of property, house, or apartment, loans for a home extension, and loans against residential property.
Auto Loan
Two-Wheeler Loan: Up to 100% loan of the on-road price of bikes and scooters at attractive interest rates starting at 0.99%* p.a. and easy EMIs.
Used Car Loan: Muthoot offers hassle-free loans to buy a used car of choice at low-interest rates.
Subsidiaries
- Muthoot Microfin Limited Muthoot Microfin Limited is one of the leading microfinance institutions in India, focused on providing micro-loans to women entrepreneurs, predominantly in rural regions of India. Customers are organized in groups of four to ten women from economically weaker sections of society, living in rural and semi-urban areas or urban slums.
- Muthoot Housing Finance Company Limited Muthoot Housing Finance Company Ltd provides affordable housing loans to customers in the middle-income and lower-income categories. It offers low ticket loans with an extended repayment period, loans for the purchase of property, house, or apartment, loans for a home extension, and loans against residential property.
- Muthoot Pappachan Technologies Muthoot Pappachan Technologies, the technology arm of the Muthoot Blue Group, provides a wide portfolio of products and services like cloud solutions, consulting services, product implementation services, and application development & maintenance/hosting services, virtualization, green technologies, etc.
Financial Performance
Key Strengths
- Established market position in gold financing, supported by the extensive experience of the promotersMFL is the third-largest gold loan non-banking financial company (NBFC). The promoters have spent over seven decades in the business of lending against gold jewelry. Over the years, the group has established a strong reputation and brand in South India, particularly Kerala and Tamil Nadu, and has an appropriate assessment and underwriting methodology.
The gold loan AUM is estimated at around Rs 18,068 crore as of March 2021 from Rs 14,924 crore as of March 31, 2020.
- Diversified product profile of the MPG group currently, the group operates in five major segments: loans against gold jewelry, two-wheeler finance, microfinance, housing finance, and small business loans. Overall managed AUM of MPG is estimated to be around Rs 26,993 crore as of March 31, 2021 (Rs 24,103 crore as of March 31, 2020). The proportion of gold loans has seen a steady increase to over 60% as of March 31, 2020, and further to 67% as of March 31, 2021. The microfinance portfolio is the second largest with around 18% of the overall portfolio of the group as of March 31, 2021.
- Healthy asset quality in the gold loan segment to support overall group asset quality gross NPAs for MFL stood at 1.92% as of March 31, 2021, against 1.86% as of March 31, 2020. The NPAs are primarily in the SME portfolio wherein the performance was affected due to a slowdown in the sector. In the gold loan segment, MFL has maintained healthy asset quality over the years, backed by strong collection efficiency, as reflected in GNPAs of 1.0-2.0% over the last five fiscals. Asset quality, as better measured by credit costs, has also been under control by 0.5% during this period for gold loans.
- Improving earnings profile for gold loan business’s profitability, on a standalone basis, has improved in fiscal 2021 on account of higher returns from the gold business during the pandemic, steady reduction in overall OPEX cost over the years, and overall low credit costs.
Roma improved significantly to 1.8% compared to just 1.2% and 1.0% in fiscal 2020 and 2018, respectively. On a consolidated level, NFL’s profitability accounts for 83% of the overall group profits and is expected to support the group’s profitability. Therefore, the profitability of MPG is expected to improve steadily over the medium term. However, the group’s ability to manage earnings primarily within non-gold segments will be monitored.
Credit Risks
- Geographical concentration in portfolio high geographical concentration persists, with South India accounting for around 63% of the gold loan portfolio; with Tamil Nadu and Kerala constituting around 26% of the gold loan portfolio as of March 31, 2021 (as compared to 70% and 34%, respectively, as on March 31, 2019). At the MPG level, around 80% of AUM is concentrated in South Indian states, with Tamil Nadu and Kerala constituting around 47.
- Potential challenges associated with non-gold loan segments non-gold segments accounted for less than 35% of the overall portfolio as of March 31, 2021. While MPG has managed to grow these businesses and increase the segmental share over the last 2-to 3 years, potential challenges linked to the seasoning of the loan book and asset quality remain. Asset quality in both microfinance and vehicle finance segments has witnessed deterioration. The 90+ dpd level for MML (microfinance business) stood at 8.1% as on March 31, 2021 (5.7% as on March 31, 2020). The gross NPAs in the case of MCSL (vehicle finance businehave has increased to 11.1% as of March 31, 2021, against 6.8% as of March 31, 2020. The 90+ dpd for MHFL (housing finance business) stood at 3.5% as of March 31, 2021.
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Bonds India ditches the traditional ways of investing by offering a blockchain-based platform for investors that ensures instant online settlements and reduces counter-party risks. Choose Bonds India for its sleek interface, fail-safe communication, and a step-by-step guide to ensure a well-placed bid. You can apply for Muthoot Fincorp NCD IPO on the BondsIndia website.
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 Fincorp NCD IPO?
The application process on the Bonds India platform is simple and seamless.
- Click on the details of Muthoot Fincorp Limited NCD IPO
- 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 is complete!