Muthoot Finance NCD

Muthoot Finance, the largest gold financing company in terms of loan portfolio, is in the process of raising up to Rs 1,000 crore through a public issue of secured redeemable non-convertible debentures. The issue opened for subscription on 23rd August, 2011.

Muthoot's operating history has evolved over a period of 72 years since M George Muthoot (the father of the Promoters) founded a gold loan business in 1939. Presently, it is the largest gold financing company in India in terms of loan portfolio, according to the IMACS Research & analytics Report (2010).

The NCDs will be listed on the NSE and the BSE and will be used for debt repayments and increasing its market base in the north, east and west zones. The NCD issue has three investment options and yield of up to 12.25 per cent per annum.

Issue Highlights

• Minimum Subscription: Rs 5000 (5 NCDs of face value Rs 1000 each)
• Attractive coupon rate of 12.25% per annum
• Various Modes of Interest Payment (Direct Credit, NECS, RTGS, NEFT, Registered Post / Speed Post)
• No TDS on listed debentures (tax to be levied as per the tax slab)
• To be listed on NSE & BSE

AAbout the Company : History of 72 years Large national presence with 2997 branches as of 30th June 2011 Gold Loan Assets Under Management: Rs 15,728 Crore Approximately 112 tons of gold held as loan security. Net Profit for FY 2011: Rs 494 Crore Net Worth: Rs 2397 Crore DDetails of the Issue are as follows: Particulars Series I Series II Series III Tenure 24 months 36 months 60 months Minimum Application Rs. 5000 and in multiples of one bond thereafter Face Value Rs. 1000 per debenture Issue Price Rs. 1000 per debenture Interest Payment Annual Coupon rate (%) QIBs 11.75 12 12 Corporates 12 12.25 12.25 Individuals/ HUFs (Investment > INR 5 Lakhs) 12 12.25 12.25 Individuals/ HUFs (Investment < INR 5 Lakhs) 12 12.25 12.25 Effective Yield (%) QIBs 11.75 12 12 Corporates 12 12.25 12.25 Individuals/HUFs (Investment > INR 5 Lakhs) 12 12.25 12.25 Individuals/HUFs (Investment < INR 5 Lakhs) 12 12.25 12.25 A 12 per cent rate of interest on a debt instrument offers an opportunity for investors to obtain higher yields resulting from a rising interest rate scenario. Secondary market yields on the slightly higher rated AA securities with a residual maturity of two years, are almost two percentage points lower than the rate offered by Muthoot which makes it an attractive instrument. Deposit taking NBFCs with slightly better credit profile are offering anywhere between 9.55-10 per cent on deposits with similar tenors.

Public Issue of Non Convertible Debentures from Manappuram Finance

  Manappuram Finance, a leading NBFC from Kerala, specializes in gold loans, has announced a public issue of Secured redeemable Non Convertible Debentures  of Rs.1,000 each.  The company will raise up to Rs.400 crore, with an option to retain oversubscription up to Rs.350 crore, aggregating Rs.750 crore.

Mannapuram Finance Ltd. is a part of the Manappuram Group with nine companies having diverse interests in Gold Loans, Asset Financing, Insurance, Foreign Exchange, Money Changing, and most recently, gold jewellery. Highlights of the issue:

Issue Opens on August 18, 2011 Issue Closes on September 5, 2011 Attractive coupon of 12.20% per annum No TDS on listed debentures Details of the two available options: Option I II Tenure 400 Days 24 Months Minimum Application Rs. 5000 & in multiples of 1 bond thereafter Rs. 5000 & in multiples of 1 bond thereafter Face Value Rs. 1000 Rs 1000 Issue Price Rs. 1000 Rs. 1000 Interest Payment Cumulative, on maturity Semi-Annual Coupon Rate (%) Resident Individuals/HUF NA 12.20% Corporates/Institutions/QIBs NA 12.00% Yield (%) Resident Individuals/HUF 12.00% 12.56% Corporates/Institutions/QIBs 12.00% 12.34% Redemption Amount Rs. 1132.25 for all categories (face value plus redemption premium) Face value of NCD plus any interest that may have accrued Nature of Indebtedness Pari Passu with other secured creditors and priority over unsecured creditors Under option II, the yield to maturity will be 12.34 per cent in categories I and II, and 12.56 per cent in category III. The interest payment will be semi-annual. Mr. Unnikrishnan, Managing Director of the company said the market for gold loan financing was largely untapped and would offer a vast potential for further growth. The organised gold loan market was about 1.2 per cent of the value of total gold stock in India. He said the company was intending to enter the travel and tourism business. As of March 31, 2011, the company's gold loan portfolio comprised more than two million gold loan accounts. http://www.manappuram.com/ Download prospectus