The NCD issue, which will remain open for subscription from 18 August to 9 September, includes a base issue size of ₹125 crore with an option to retain oversubscription up to ₹125 crore, aggregating up to ₹250 crore.
Gold loan non-banking financial company (NBFC) Muthoottu Mini Financiers Ltd has launched a public issue of secured and unsecured non-convertible debentures (NCDs), which is offering an effective annualized yield of up to 10.47%.
The NCD issue, which opened for subscription on 18 August, closes on 9 September. It includes a base issue size of ₹125 crore with an option to retain oversubscription up to ₹125 crore, aggregating up to ₹250 crore.
The issue is available at a face value of ₹1,000 each, and the NCDs are proposed to be listed on BSE Ltd.
According to the company, net proceeds of the issue will be utilized for the purpose of onward lending, financing and for repayment/prepayment of principal and interest on borrowings of the company (at least 75%), and the rest (up to 25%) for general corporate purposes.
“While the coupon offered by the company is very attractive, it is still meant only for those investors who wish to take high risk. The credit rating of the company has always carried moderate to moderately-high risk. Hence, it may not be for investors who want to take limited risk," said Harshad Chetanwala, a Sebi-registered investment adviser (RIA) and co-founder of MyWealthGrowth.
In addition to its gold loan business, Muthoottu Mini offers microfinance loan, depository participants, money transfer, insurance broking, PAN card-related and travel agency services.
As of 31 March, the company had 386,110 gold loan accounts, predominately from rural and semi-urban areas, aggregating to ₹1,935.10 crore, which accounted for 97.04% of its total loans and advances.
According to Muthoottu Mini, the yield on its gold assets during the past three fiscals increased from 19.17% in FY19 to 19.57% as of FY21.
The net non-performing assets (NPAs) for FY21 stood at 0.75%, which is lower than 1.39% reported in FY19.
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