Saturday, April 27, 2019

Muthoot Homefin India Limited NCD

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Muthoot Homefin India Limited was incorporated on August 26, 2011 and is currently the wholly owned subsidiary of Muthoot Finance Limited, which is one of India’s largest gold financing companies by loan portfolio. Company is a non-deposit taking housing finance company and was registered with the National Housing Bank on May 19, 2014.

The company focuses on providing affordable housing loans to Lower Middle Income groups and Economically Weaker Sections of society in tier 2, tier 3 and tier 4 cities. Company customers comprise primarily informal and formally salaried workers and self-employed individuals. As on September 30, 2018, 58.88% of loan portfolio consisted of loans made to salaried individuals, 2.26% of loan portfolio consisted of loans made to individuals who are professionals or self-employed and 38.87% of loan portfolio consisted of loans made to individuals who are businessmen.

The company has come out with an issue of secured redeemable non-convertible debentures of Rs. 150 crores with an option to retain oversubscription up to 150 Crores for issuance of additional NCDs aggregating up to Rs. 300 Crores.

The issue opens on April 8, 2019 and closes on May 7, 2019. The company is offering an interest rate or a coupon of 9.75% per annum.

The face value of the NCD is Rs. 1000 and minimum application amount is Rs. 10000 or 10 NCDs and in multiple of Rs. 1000 or 1 NCD thereafter. The issue shall get listed on BSE. DMAT account is mandatory for trading.

CRISIL has given a rating of AA/Stable to the issue. Link Intime India Private Limited is the registrar and Edelweiss Financial Services Limited is the lead manager of the issue.

Interest rates have gone down so some investors might get tempted for such company fixed deposits. But investors should understand the inherent risks of company fixed deposits. Investors have burnt their money with Jaypee, Unitech etc. So, tread with caution if you want to invest in them. Incase, you want to look at some banks offering higher interest rates than others, checkout: https://www.myfamilyinvestment.com/2012/04/latest-resident-nro-bank-fixed-deposit.html
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