Muthoot Homefin (India) Limited NCD 2019
(i) They are non-deposit taking housing finance company and were registered with the National Housing Bank (“ NHB ”) on May 19, 2014. We were incorporated on August 26, 2011, and are currently the wholly owned subsidiary of Muthoot Finance Limited (“ MFL ”), which is one of India’s largest gold financing companies by loan portfolio.
(ii) They are a part of the group with a legacy of serving customers for over 130 years. They currently boast of a customer base consisting of 20,237 customers as of September 30, 2018.
(iii) They focus on providing affordable housing loans to Lower Middle Income (“LMI ”) groups and Economically Weaker Sections (“ EWS ”) of society in tier 2, tier 3 and tier 4 cities. Our customers comprise primarily informal and formally salaried workers and self -employed individuals.
(iv) As on September 30, 2018, 58.88% of the loan portfolio consisted of loans made to salaried individuals, 2.26% of our loan portfolio consisted of loans made to individuals who are professionals or self -employed, and 38.87% of the loan portfolio consisted of loans made to individuals who are businessmen.
These loan products are secured by creating a mortgage on the residential properties. In addition, they also provide salaried customers with loans against property (“ LAP ”) by allowing them to mortgage their property with the company.
(v) As on September 30, 2018, they have a provided loans to customers located in 11 states and one union territory, namely Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Telangana, Uttar Pradesh, and Chandigarh.
(vi) Public issue by Muthoot home in (India) limited, (“Company” or “issuer”) of secured redeemable non-convertible debentures of face value of ₹1,000 each (“NCDs”), for an amount up to ₹1,500 million (“base issue size”) with an option to retain over-subscription up to ₹1,500 million for issuance of additional NCDs aggregating up to ₹3,000 million (“issue”).
Objective of NCD Muthoot Homefin (India) Limited NCD 2019:
The Objective of raising 150 Cr from NCDs is:
(i) For the purpose of onward lending, financing, refinancing the existing ( payment of the interest and /or repayment /prepayment of principal of borrowings.
(ii) For General Corporate Expense.
Muthoot Homefin (India) Limited NCD 2019 Details:
| Open Date: | Apr 08 2019 |
| Close Date: | May 07 2019 |
| Issue Size: | ₹ 150 Cr. |
| Face Value: | ₹ 1000 Per NCD |
| Market Lot: | 1 NCD |
| Minimum Order Quantity: | 10 NCD |
| Listing At: | BSE |
Promoters:
They are promoted by Muthoot Finance Limited, which is in turn promoted by Mathai George George Muthoot, George Thomas Muthoot, George Jacob Muthoot, and George Alexander Muthoot.
Mathai George George Muthoot, George Thomas Muthoot, and George Alexander Muthoot continue to be associated with the Company and serve on our Board of Directors.
Financials:
1. The Company has a Revenue of 103 Cr in FY17-18.
2. The Company has a PAT of 20 Cr in FY17-18.
3. The Company has a manageable Debt/Equity of 3.71.
4. The total AUM as on 30.09.2018 is close to 1700 Cr.
5. The gross non-performing assets (“NPAs”) as a percentage of our AUM as on September 30, 2018, in accordance with Ind AS, stood at 0.78%.
Credit Rating:
(i) The NCDs proposed to be issued under this Issue have been rated “CRISIL AA/Stable” by CRISIL for an amount of up to ₹3,000.00 million pursuant to their letter dated March 1, 2019, and revalidated by their letter dated March 20, 2019.
(ii) The rating of AA/Stable indicates that instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. This rating is not a recommendation to buy, sell or hold securities and investors should take their own decision.
Interest Rates:
| Series | I | II | III | IV | V | VI | VII | VIII | IX | X |
| Frequency of Interest payment | Monthly | Monthly | Monthly | Annually | Annually | Annually | Cumulative | Cumulative | Cumulative | Cumulative |
| Tenure (months) | 24 | 38 | 60 | 24 | 38 | 60 | 24 | 38 | 60 | 90 |
| Nature | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured |
| Coupon (% p.a) | 9.25% | 9.50% | 9.75% | 9.50% | 9.75% | 10.00% | NA | NA | NA | NA |
Post Tax returns:
(i) Sold after Maturity :
The interest earned through NCDs will be added to the total income and will be taxed at 5%, 20%, and 30% respectively depending upon the income slab of an Individuals.
(ii) Sold Before Maturity:
If you decide to sell the NCDs on the stock exchange, capital gains can also arise. If NCDs are sold within a period of 12 months from the date of allotment, short term capital gains/loss (STCG) will arise and if you decide to sell NCDs after a period of 12 months, the resulting gain or loss is called long term capital gains/loss (LTCG)
Recommendation:
Review and Recommendation of Muthoot Homefin (India) Limited NCD 2019 by InvestorZone team: 5/10
IZ Review
(i) The company has good fundamentals.
(ii) The company has a good pedigree of management of Muthoot Group.
(iii) The investors who are looking for something more than FD can surely have a look in this NCD.
1-5: Fair
5-7: Good
7-10: Excellent
Lead Manager of Muthoot Homefin (India) Limited NCD 2019:
- Edelweiss Capital Limited
- Milestone Trusteeship Services Private Limited
Registrar of Muthoot Homefin (India) Limited NCD 2019:
- Link Intime India Private Limited
Discussion on Muthoot Homefin (India) Limited NCD 2019:
2 Comments
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When does the payout start up? Is it advisible to go for Series III? I want an assured monthly income better than FD. My income is not in taxable zone. Can anyone advise?
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