High Yield | AA-/Stable Rated | Minimum Investment: 10k Only
Bond overview
Muthoot Fincorp Limited is issuing the Non-Convertible Debentures. These NCDs are AA-/Stable rated by CRISIL. The NCDs are being issued in thirteen series: coupon ranges from 9.0% to 10.1% p.a. and different tenures of 24 months, 36 months, 60 months, 72 months and 92 months. The NCDs are secured and redeemable in nature.
Coupon rates and effective yield for each of the series
Allocation Ratio
The allocation ratio is prepared based on norms laid down by SEBI. Before announcing the allocation ratio, the same has to be approved by SEBI. Once the IPO subscription closes, applications will be divided into different categories. The category-wise allocation ratio is always decided and declared during the launch of the particular IPO. Considering the Allocation Ratio, units will be assigned to applicants. Refer to the chart to know the application ratio for Muthoot Fincorp Ltd NCD-IPO.
Investment Process for MFL NCD IPO
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If the investment amount is less than & up to 10 lakhs, retail investors can apply for an IPO online.
If the investment amount is more than 10 Lakhs.
Financial Overview
Snapshot stating the Revenue, Expenses, PAT (In crores)
Cash flow for last 5 years (In crores)
Cash flow refers to the movement of cash in and out of the business at a specific point in time. It represents the net balance of the cash movement.
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- *Cash flow from operating activities reflects the amount a company generates through its product of services.
- **Cash flow from investing activities reflects cash generated and spent relating to investing activities, like purchase of assets, sales of securities etc.
- ***Cash flow from financing activities gives an insight into the financial stability of a company to its investors. It reflects the net flows of cash that are used to fund the company.
Ratio Analysis
Issue analysis
Pros
- The NCD is AA- rated security with a stable outlook.
- The yield offered is 10.10% which is much higher than FDs.
Cons
- The operations of NBFC is geographically constrained. It is majorly operated in South India.
To get better returns than Bank FDs, invest in NCD-IPOs online.
About MFL
Founded in 1997, Muthoot Fincorp Ltd.(MFL) is a non-deposit taking, one of the leading NBFCs in the country. The NBFC primarily deals into lending against gold jewelry. It is the flagship company of the Muthoot Pappachan Group also popularly known as the Muthoot Blue Group, which has diverse business interests such as hospitality, real estate, and power generation.
Business Verticals-
FY 2024-
Strengths
- Strong Market Position: Over 70 years in gold financing.
- Diversified Offerings: Five segments—gold loans, two-wheeler finance, microfinance, housing finance, and small business loans.
- Solid Capital Base: Standalone net worth of Rs 4,423 crore as of March 31, 2024.
- Low Asset Risk: Secured by liquid gold jewellery.
- Improved Asset Quality: GNPAs reduced to 1.6% in March 2024 from 2.1% in March 2023.
- Enhanced Profitability: RoMA improved to 2.1% in fiscal 2024, up from 1.9% in fiscal 2023.
Weakness
- Geographical Concentration: South India accounts for 57% of the gold loan portfolio as of March 31, 2024, down from 70% in 2019.
- Diversification: Non-gold segments now make up 48% of the total portfolio.
- Growth with Challenges: While MPG has grown non-gold segments, potential risks related to loan book seasoning and asset quality remain.
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Source- Tranche I Prospectus August 13, 2024
Disclaimer- The information is published as on date 08/28/2024 based on information available on Tranche I Prospectus August 13, 2024. The information may be subject to change in case of change in terms of prospectus or any other reason as the case maybe. Contents which are exclusively for educational information/knowledge sharing on capital market concepts and has no influence the investment/sale decisions of any investors
