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Tuesday, August 7, 2012

Muthoot Finance to raise Rs 500 cr via NCDs

Muthoot Finance Ltd intends to raise Rs 500 crore by way of an issue of non-convertible debentures.

The company will issue NCDs to raise Rs 250 crore, but will accept up to Rs 500 crore if the issue is over-subscribed, Managing Director George Alexander Muthoot told Business Line on Saturday.

The interest rates will be decided closer to the date of the issue.

“We are seeing some softening of interest rates,” he said, but stressed that the company would not wait for further softening of rates.

If the rates come down further, there could be another issue, he said.

In the last 12 months, the company has come out with NCD issue thrice to raise Rs 1,400 crore. There could be another three issues in the current financial year too, he said.

The debentures are of two, three and five year tenors.

Secured NCDs (‘Muthoot Gold Bonds’) today account for 34 per cent of the company’s funding at Rs 7,117 crore, next only to bank borrowing, which accounts for 42 per cent of Rs 8,823 crore.

The company has got its NCDs rated by Crisil and ICRA. Crisil has given it a rating that indicates “high degree of safety with regard to timely payment of interest and principal on the instrument’’.

ICRA’s rating indicates “high quality credit rating and lowest credit risk, with a stable outlook’’.


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