Business

Gold Loan Financing NBFC’s plan mega NCD issues

Muthoot Finance limited and Manappuram Finance Limited have both announced plans to raise capital from the public by the issue of Non-Convertible Debentures. While Muthoot plans to raise Rs. 1,000 Crore , Manappuram is looking to raise Rs 750 Crore.

gold loan ncd

Muthoot Finance Non Convertible Debentures

Muthoot Finance Limited , the largest gold financing company in India in terms of loan portfolio,will open on August 23, 2011, its maiden public issue of secured, redeemable, non-convertible debentures of face value of Rs. 1,000 each aggregating upto Rs. 500 crore with an option to retain over subscription upto Rs. 500 crore, aggregating to a total of upto Rs. 1,000 crore .

The NCD Issue with three investment options and effective yield of upto 12.25% (per annum) closes on September 5, 2011, with an option of early closure as may be decided by the duly authorised committee of board of directors of the Company subject to necessary approvals. The face value of each NCD is Rs. 1,000 and the minimum application is for five NCDs (Rs. 5,000) and in multiples of one NCD thereafter.

The NCDs offered through this Prospectus are proposed to be listed on the National Stock Exchange of India Limited (“NSE”) and the Bombay Stock Exchange Limited (“BSE”).

The NCDs proposed to be issued under this Issue have been rated ‘CRISIL AA-/Stable’ by CRISIL and ‘[ICRA] AA- (stable)’ by ICRA for an amount of upto Rs. 1,000 crore vide their respective letters dated July 25, 2011.

There are three investment options:

Option I: The maturity date is 24 months from the deemed date of allotment and the interest is payable annually. The coupon rate and effective yield is 11.75% p.a. for NCD Holders in Category 1. The coupon rate and effective yield is 12% p.a. for NCD Holders in Category II and Category III.

Option II: The maturity date is 36 months from the deemed date of allotment and the interest is payable annually. The coupon rate and effective yield is 12% p.a. for NCD Holders in Category 1. The coupon rate and effective yield is 12.25% p.a. for NCD Holders in Category II and Category III.

Option III: The maturity date is 60 months from the deemed date of allotment and the interest is payable annually. The coupon rate and effective yield is 12% p.a. for NCD Holders in Category 1. The coupon rate and effective yield is 12.25% p.a. for NCD Holders in Category II and Category III.

Manappuram Finance

Manappuram Finance Limited , one of the leading listed NBFCs lending money against the pledge of household, used, gold jewellery in India opened on August 18, 2011, its maiden public issue of bonds in the nature of secured, redeemable, non-convertible debentures of face value of Rs. 1,000 each aggregating to Rs. 400 crore with an option to retain over subscription up to Rs. 350 crore, aggregating to Rs. 750 crore.

The NCD Issue with two investment options and yield to maturity of up to 12.56% (per annum) closes on September 5, 2011, with an option of early closure as may be decided by the board of directors of the Company subject to necessary approvals. The face value of each Bond is Rs. 1,000 and the minimum application can be for five Bonds (Rs. 5,000) and in multiples of one Bond thereafter. The Bonds will be listed on Bombay Stock Exchange (“BSE”) and will have a tradable lot size of 1 Bond.

The Bonds proposed to be issued by the Company have been rated CARE AA- by Credit Analysis and Research Limited (“CARE”) and BWR AA- by Brickwork Ratings India Pvt. Ltd. (“Brickwork”).

There are two investment options:

Option I: The maturity date is 400 days from the deemed date of allotment and the maturity amount per Bond is Rs. 1,132.25 for Bondholders in all categories (Face Value of the Bonds plus redemption premium). The yield to maturity for bondholders in all categories is 12% p.a.

Option II (Semi-Annual interest payment): The maturity date is 24 months from the deemed date of allotment. The interest rate is 12% p.a. for Bondholders in Categories I and II and 12.2% p.a. for Bondholders in Category III. The yield to maturity is 12.34% p.a. for Bondholders in Categories I and II and 12.56% for Bondholders in Category III. The interest payment is semi-annual and the face value plus any interest that may have accrued is payable on redemption.

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