Muthoot Finance Plans To Raise Rs 2,000 Crore Through Bonds
Pedestrians walk past a Muthoot Finance Ltd. branch in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Muthoot Finance Plans To Raise Rs 2,000 Crore Through Bonds

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Gold loan focused non-banking finance company Muthoot Finance Ltd. on Monday said it is looking to raise up to Rs 2,000 crore through non-convertible debentures for lending purposes.

The base size of the issue is Rs 100 crore with an option to retain oversubscription up to Rs 1,900 crore, aggregating up to Rs 2,000 crore, the company said in the release.

"The issue will augment the company's long term funding requirements, thereby supporting the stable growth that our company envisages," Muthoot Finance's managing director George Alexander Muthoot said in the release.

The funds raised through this issue will be utilised primarily for lending activities, the company said.

There are six investment options for secured NCDs with monthly or annual interest payment frequency or on maturity redemption payments with coupon ranging from 7.15% to 8% per annum.

The issue will open on Oct. 27, 2020, and close on Nov. 20, 2020, with an option to close on such earlier date or an extended date as may be decided by the board of directors or NCD committee, the release said.

The bonds are proposed to be listed on BSE.

The NCDs under this issue has been rated AA/positive by Crisil and AA (stable) by ICRA, indicating a high degree of safety regarding timely servicing of financial obligations, the company said.

The lead managers to the issue are Edelweiss Financial Services Ltd., J M Financial Ltd., Equirus Capital Private and A K Capital Services Ltd. IDBI Trusteeship Services is the debenture trustee for the issue.

In the quarter ended June 30, 2020, the company's profit after tax stood at Rs 841 crore.

Its net-worth was Rs 12,316 crore and had a capital adequacy ratio of 26.30% as on June 30, 2020.

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