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Gold financing company Muthoot Finance has plans to raise up to ₹400 crore through a public issue of secured, redeemable, non-convertible debentures.
In a draft prospectus filed with the BSE on Friday, the company stated that the base issue size is ₹200 crore with the option to retain an additional ₹200 crore. The varying maturities of the NCDs are 400 days, two, three and five years.
All NCDs have a face value of ₹1,000 and will be listed on the BSE. ICRA has given AA rating for the NCDs with ICICI Securities as the lead manager for the issue.
Good time to mop up“We think this is a good time to raise money through NCDs. The issue will help us in providing growth and more stability to our business and also improving both the topline and the bottomline. For investors also, considering the probabilities of a rate reduction by the RBI being high, it’s an attractive option to lock in their investments for the long term,” Oommen K Mammen, CFO, Muthoot Finance, told BusinessLine .
However, the company has not disclosed the subscription date for the issue in the prospectus. It said the unsecured NCDs will be in the nature of subordinated debt and will be eligible for Tier II capital and accordingly will be utilised in accordance with statutory and regulatory requirements set by the RBI. The funds so raised would be utilised for lending or general corporate purposes. The company said the funds will not be utilised for providing loans to or for acquisition of shares of any person who is part of the same group. The company would not purchase or acquire any property or business using these funds.
On Friday, the shares of Muthoot Finance edged down 1 per cent ₹193.65 on the BSE.
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