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Muthoot Finance Ltd has reserved 60 per cent of its Rs 500-crore maiden non-convertible debenture (NCD) issue for retail investors. The company has a greenshoe option of an additional Rs 500 crore.
Muthoot Finance Ltd is one of the largest gold loan NBFCs that lends money against household jewellery.
To attract retail investors, the company offers a higher coupon rate of 12.25 per cent for tenors of three and five years and 12 per cent for tenor of two years. For institutional investors, it offers a coupon rate of 12 per cent for three and five years and 11.75 per cent for two years.
The company typically extends loans for a period of one year with an average ticket size of Rs 35,000.
But, the company is raising money for 2-5 years which is long-term in nature.
“We are long-term players and we are not averse to taking long-term debt in our book,” said Mr George Alexander Muthoot, Managing Director, Muthoot Finance.
The face value of each NCD is Rs 1,000 and the minimum application is for five NCDs (Rs 5,000). The NCDs are proposed to be listed on the NSE and BSE.
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