Latest News
-
Honasa Consumer to Strengthen Operations by Merging Fusion Cosmeceutics and Just4Kids -
Wipro Reports 7.8% Decline in Q4 Net Profit; CEO Highlights Economic Challenges -
IREDA Hits Record Annual PAT of Rs 1,252 Cr in FY24; Q4 Profits Up by 33% -
Massive Employee Exodus Hits India's Top IT Companies in FY23-24 -
Air India Enhances Operational Efficiency with New Crew Management System -
BlackRock Acquires Shares in Electrosteel Castings and PTC India for Rs 207 Crore -
IndiGo Enhances Domestic Routes with Direct Chennai-Durgapur Flights -
Tesla to Recall Nearly 4,000 Cybertrucks Over Accelerator Pedal Fault -
Reliance, ONGC, Tata, Adanis: Energy Stocks Didn't Get The Memo Of Bears, Up 12% In 30-Days; 10 Stocks To BUY -
Sebi to Enhance Price Discovery for Firms Trading Below Book Value
Should You Invest In Muthoot Finance NCDs That Offer 8% Interest?
Recently, Muthoot Finance has made the announcement that it will raise nearly Rs 300 crore via the Public Issue of Secured Reedemable Non-Covertible Debentures (NCDs).
Recently, Muthoot Finance has made the announcement that it will raise nearly Rs 300 crore via the Public Issue of Secured Reedemable Non-Covertible Debentures (NCDs). The financial corporation and leading gold loan Non-Banking Financial Corporation (NBFC) announced its 27th series of Public Issue of Secured Redeemable Non-Convertible Debentures of face value of Rs 1000 each (Secured NCDs).
The NBFC reported that the base issue size comes with the choice to retain oversubscription nearly Rs 225 crore aggregating up to a tranche limit of Rs 300 crores. It is worth mentioning that the issue is scheduled to close on June 17th, 2022, according to the press release of Muthoot Finance.
Meanwhile, Muthoot finance has decided to retain the choice to close the issue on a previous date or extend it as may be decided by its Board of Directors or NCD committee, added the statement. The issue has already opened on May 25, 2022. Check key details below:
What are NCDs?
Non-convertible debentures can be defined financial instruments used by companies for raising long-term capital. It is done via a public issue. The reason why they are called NCDs as there is no possibility for conversion into equity or stocks. They have emerged beneficial to fixed income investors as they have the potential of offering higher return. They are less risky and provide tax benefits to investors.
Should you invest in Muthoot Finance NCDs?
The important question remains that should you invest in Muthoot Finance NCDs that offers 8% interest? Before investing in NCDs it is important to check the company's background. It is important to find out if the company has previously raised money and repaid the debt successfully. Secondly, the biggest draw of NCDs remain the interest rate offered by the company. But, beyond that you must check that the high interest rate offered by company has to be backed by good credit rating. In both the respect, Muthoot Finance has received AA+ rating which is stable by ICRA. It indicates high degree of safety. Secondly, Muthoot has previously raised money on several occasions through non-convertible debentures. So, it will be appropriate to invest in the NCDs issued by Muthoot as the interest offered is higher compared to most of the investment options.
NCD Details of Muthoot Finance and Interest
The issue period is from May 25th to June 17th. The base size of the issue is Rs 75 crore with an option to retain oversubscription up to Rs 225 crore thus aggregating up to a tranche limit of Rs 300 crore. The NCDs has a face value of Rs 1000 each. Investors can avail "interest payment option" and "on maturity payment option". Check the table below for more detail:
| Interest Payment Option | ||||
|---|---|---|---|---|
| Interest | 36 Months | 60 Months | 84 Months | |
| Payment | Coupon % p.a. | Coupon % p.a. | Coupon % p.a. | |
| Annual | 7.5 | 7.75 | 8 | |
| Monthly | 7.25 | 7.5 |
| On Maturity Payment Options | |||
|---|---|---|---|
| Investment | 36 Months | 60 Months | |
| Amount (₹) | Maturity Value (₹) | Maturity Value (₹) | |
| 1,00,000 | 1,24,230 | 1,45,240 |
About Muthoot Finance
The NBFC has already built a strong presence in the gold loan services. Muthoot's total income for the Q4 2022 FY has dipped to Rs 3041.14 crore from Rs 3,118.98 crore reported in the same period a year ago, according to the company's regulatory filing. It also registered a slight dip in its consolidated net profit at Rs 1006.23 crore for the Q4 that ended in March because of core interest income decline. Interest income of Muthoot came down by 3.7% at Rs 2916.87 crore in Q42022 FY.
