Muthoot Finance is currently planning Tranche II backed NCD bonds.These bonds are scheduled to be offered for sale on the 21st.cent September 2023. Muthoot Finance is India’s largest financial lending company. Muthoot Finance NCD offers NCD interest rates up to 9%. These NCDs are offered with a tenure of 36 months to 60 months. Interest is paid monthly, annually, or at maturity. Should you invest in Muthoot Finance NCD September 2023 issue? What are the risk factors to consider before investing in Muthoot Finance Tranche II NCD in 2023?
About Muthoot Finance Limited
Muthoot Finance Limited is the flagship company of Muthoot Group, a Kerala-based trading company with diversified businesses in the fields of financial services, healthcare, education and hospitality.
The company derives the majority of its business from South India (50% of its total gold loan portfolio), where gold loans have traditionally been an accepted means of accessing short-term credit; We are increasing our presence beyond that. The last few years.
Published by Muthoot Finance NCD – September 2023
Here are the details of the problem:
| Subscription start date | 21-9-23 |
| Subscription end date | October 6, 2023 |
| Issued securities name | Muthoot Finance Limited |
| Type of security | Secure, redeemable and non-convertible NCDs |
| Publication size (base) | 100 million rupees |
| Publish size (option to keep beyond subscription) | 600 million rupees |
| Total issue size | 700 million rupees |
| Issue price | 1,000 rupees per deposit |
| face value | 1,000 rupees per deposit |
| series | Ⅰ～Ⅶ |
| minimum lot size | 10 bonds and then 1 bond |
| tenure | 24, 36, 60 months |
| Interest payment frequency | monthly and yearly |
| Listed | Within 6 business days for BSE |
| lead manager | AK Capital Services Limited |
| bond trustee | Idobi Trusteeship Services Co., Ltd. |
Muthoot Finance NCD Interest Rate – September 2023 issue
| series | I | II | Ⅲ | Ⅳ | V | VI | VII |
|---|---|---|---|---|---|---|---|
| Interest payment frequency | monthly | monthly | every year | every year | every year | N.A. | N.A. |
| Period of employment (months) | 36 | 60 | twenty four | 36 | 60 | 36 | 60 |
| Coupon (%/year) – II, III, IV investors | 8.75% | 8.75% | 8.75% | 9.00% | 9.00% | N.A. | N.A. |
| Effective yield (%/year) – II, III, IV investors | 8.75% | 8.75% | 8.75% | 9.00% | 9.00% | 9.00% | 9.00% |
| Amount at maturity (Rs.) | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,295 | 1,538 |
What are the credit ratings of these NCDs?
Muthoot Finance NCD rating has been assigned as AA+ (Stable) by ICRA. Products with this rating are considered to have a high degree of security regarding the timely repayment of financial obligations. The credit risk of such products is very low.
What about the company’s profits?
Consolidated profit is as follows.
- FY2021 – 3,722.1 million rupees
- FY2022 – 3,954.3 million rupees
- FY2023 – 3,473.5 million rupees
Why invest in these NCDs?
- Muthoot Finance NCD offers attractive interest rates where investors can earn up to 9% interest per annum.
- Muthoot Finance generates consistent profits. This means that the company has the ability to pay interest on time to her NCD holders without any delay.
- Issue a secure NCD. A secured NCD is safer compared to an unsecured NCD. If a company liquidates or goes out of business for any reason, NCD investors who have secured security can preferentially repay the capital backed by the company’s assets with interest. Therefore, it is safe to invest in such safe NCD options.
Would you like to invest in these NCDs?
- The spread of the coronavirus disease (COVID-19) pandemic and the resulting nationwide lockdowns and COVID-19 restrictions are impacting the Company’s operations and financial condition. Future restrictions or lockdowns related to the coronavirus could impact the company’s business.
- Its financial performance is particularly vulnerable to interest rate risk. If we fail to adequately manage interest rate risk in the future, our net interest margin could be adversely affected and, as a result, our business and financial condition could be adversely affected.
- Please refer to the NCD prospectus for complete risk factors.
How can I invest in Muthoot Finance NCD Online?
This issue is available only in demat format. You can apply online or through the website of the broker where you maintain your demat account. Application forms can be downloaded from the Lead Manager’s website. Please refer to the prospectus for further details.
How safe is Muthoot Finance NCD?
These NCD bonds are rated AA+ by ICRA. Such credit ratings have low credit risk.
Should I invest in Muthoot Finance NCD published on September 23?
Although these NCDs offer opportunities, they also carry some risks.
- The September 2023 issue of Muthoot Finance NCD has a high interest rate. These NCDs are rated AA+ by ICRA and are considered good (although AAA rated bonds could have been better). It is safe because it is a secure NCD.
- However, such credit ratings may change in the future without prior notice. Investors should not forget that some NBFC companies have delayed interest and principal repayments in the past.
High-risk investors can invest in these NCDs for short to medium term.
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. He has been analyzing financial markets for the past 20 years. He can be contacted at suresh@myinvestmentideas.com.
