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Business News/ Money / Personal Finance/  This Kerala-based NBFC's NCDs promise to double your money in 75 months. Should you invest?
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This Kerala-based NBFC's NCDs promise to double your money in 75 months. Should you invest?

In six years and three months, an investment in non-convertible debentures issued by Muthoot Mercantile would grow 100 per cent. The issue will close on May 17.

The issue carries a BBB rating with a stable outlook by India Ratings.Premium
The issue carries a BBB rating with a stable outlook by India Ratings.

Muthoot Mercantile, a unit of Muthoot Ninan Group, promises to double the investors’ money in a span of 75 months (six years and three months) via its non-convertible debentures (NCDs), which opened for public subscription on Monday, May 6.

ThisThiruvananthapuram-basednon-banking financial corporation (NBFC) has launched a fresh issue of secured redeemable non-convertible debentures, which will close on May 17.

The face value of NCD is 1,000. The minimum application requires investors to invest 10 NCDs, i.e., 10,000, in multiples of 1,000.

The issue is meant to raise 50 crore with an option to retain over-subscription up to 50 crore, aggregating up to 100 crore.

The issue has been given an ‘Ind BBB’ rating with a ‘stable’ outlook by India Ratings & Research.

India Ratings website shows that a BBB rating is given to securities that are considered to have a 'moderate degree of safety' regarding the timely servicing of financial obligations. Such securities carry moderate credit risk. The credit rating above BBB is ‘Ind A' and below this is ‘Ind BB’.

It is noteworthy to mention that high-risk debt investments typically carry a higher interest rate, and conversely, low-risk investments offer lower interest rates.

ALSO READ: Top 5 NBFCs offering over 7% interest rate on their fixed deposits; check list here

Double the money

Although the money will double in 75 months, investors can also invest for a short duration.

If you invest for 367 days or 18 months, the debentures accrue interest at the rate of 10.50 per cent for both the general population and senior citizens.

When the investment is made for two years or 24 months, the NCDs offer an interest of 10.60 per cent per annum for the general population as well as senior citizens.

ALSO READ: How Mahindra Finance unearthed a 150 crore employee-dealer fraud

However, on an investment of three years or 36 months, debentures offer 10.75 per cent to general citizens and 50 basis points higher to senior citizens.

Period                      Interest Rate (%)
367 days                   10.50
1.5 years                10.50
2 years                      10.60
3 years                        10.75
5 years                        10.80
75 months                   Double

Muthoot Mercantile, a unit of Muthoot Ninan Group, promises to double the investors’ money in a span of 75 months (six years and three months) via its non-convertible debentures (NCDs), which opened for public subscription on Monday, May 6. 

This Thiruvananthapuram-based non-banking financial corporation (NBFC) has launched a fresh issue of secured redeemable non-convertible debentures, which will close on May 17.

The face value of NCD is 1,000. The minimum application requires investors to invest 10 NCDs, i.e., 10,000, in multiples of 1,000.

The issue is meant to raise 50 crore with an option to retain over-subscription up to 50 crore, aggregating up to 100 crore.

The issue has been given an ‘Ind BBB’ rating with a ‘stable’ outlook by India Ratings & Research.

India Ratings website shows that a BBB rating is given to securities that are considered to have a 'moderate degree of safety' regarding the timely servicing of financial obligations. Such securities carry moderate credit risk. The credit rating above BBB is ‘Ind A' and below this is ‘Ind BB’.

It is noteworthy to mention that high-risk debt investments typically carry a higher interest rate, and conversely, low-risk investments offer lower interest rates. 

ALSO READ: Top 5 NBFCs offering over 7% interest rate on their fixed deposits; check list here

Double the money

Although the money will double in 75 months, investors can also invest for a short duration. 

If you invest for 367 days or 18 months, the debentures accrue interest at the rate of 10.50 per cent for both the general population and senior citizens. 

When the investment is made for two years or 24 months, the NCDs offer an interest of 10.60 per cent per annum for the general population as well as senior citizens. 

ALSO READ: How Mahindra Finance unearthed a 150 crore employee-dealer fraud 

However, on an investment of three years or 36 months, debentures offer 10.75 per cent to general citizens and 50 basis points higher to senior citizens.

Period                         Interest Rate (%)

367 days                      10.50

1.5 years                     10.50

2 years                        10.60

3 years                        10.75

5 years                         10.80

75 months                   Doubling

(Source: muthootenterprises.com)

On a five-year investment, Muthoot Mercantile is promising to offer a return of 10.80 per cent to general investors and 50 basis points higher to senior citizens.

Finally, an investment for 75 months is set to double in value. For instance, if you invest 1,00,000 now, it will become 2,00,000 in six years and three months.

Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment-related decision.

 

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Published: 07 May 2024, 09:42 PM IST
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