PRODUCT NOTE – NCD
Muthoot Finance Limited
Public Issue Of Secured Redeemable & Unsecured Redeemable Non-Convertible Debentures
Issue Highlights
PRODUCT NOTE – NCD
Issue opens: / Friday, December 11, 2015Issue closes: / Monday, January 11, 2016
Allotment: / First Come First Serve Basis
Face Value: / Rs. 1000 per NCD
Issue Price: / Rs.1000 per NCD
Nature of Instrument: / Secured Redeemable & Unsecured Redeemable
Minimum Application: / 10 NCDs (Rs.10000) & in multiple
thereafter
Listing: / BSE
Rating: / “CRISIL AA-/Stable”by CRISIL
Cheque in Favor of:
“Escrow Account Muthoot Finance NCD
Public Issue”.
*NRI ‘S are Not Allowed to Invest
Effective Yield (p.a.):
Lead Broker: Edelweiss Broking Ltd.
Registrar: Link Intime India Private Limited
Issue Size: Issue of Secured NCDs and Unsecured NCDs aggregating upto Rs. 2,500 million with an option to retain over‐ subscription upto Rs. 2,500 million for issuance of additional Secured NCDs and Unsecured NCDs aggregating to a total of upto Rs. 5,000 million.
Issue Break up:
Category / Allocation / Issue Size (Amt in Crs)
Base Issue / Self Limit
I – Institutional / 10% / 25 / 50
II – Non Institutional / 10% / 25 / 50
III – Individual / 80% / 200 / 400
Total / 100% / 250 / 500
PRODUCT NOTE – NCD
Option / Monthly / Annually / CumulativeTenure / 2 Years / 3 Years / 5 years / 2 Years / 3 Years / 5 years / 400 days / 2 Years / 3 Years / 5 years / 87 Months
Category I / 8.75% / 9.00% / 8.50% / 9.00% / 9.25% / 8.75% / 8.25% / 8.75% / 9.00% / 8.50% / 9.27%
Category II & III / 9.50% / 9.75% / 9.25% / 9.75% / 10.00% / 9.50% / 9.00% / 9.50% / 9.75% / 9.25% / 10.02%
Issuer Overview
Muthoot Finance Limited, the largest gold loan NBFC in India in terms of loan portfolio. According to the IMaCS Research & Analytics Industry Report, Gold Loans Market in India, 2012 (“IMaCS Industry Report (2012)”), they were ranked the largest gold loan company in India in terms of loan portfolio. They provide personal loans and business loans secured by gold jewellery, or Gold Loans, primarily to individuals who possess gold jewellery but are not able to access formal credit within a reasonable time, or to whom credit may not be available at all, to meet unanticipated or other short-term liquidity requirements.
Their customers are typically small businessmen, vendors, traders, farmers and salaried individuals, who for reasons of convenience, accessibility or necessity, avail of our credit facilities by pledging their gold jewellery with us rather than by taking loans from banks and other financial institutions.
PRODUCT NOTE – NCD
COMMON TERMS FOR ALL SERIES OF THE NCDs
Issuer / Muthoot Finance Limited
Lead Broker / Edelweiss Broking Limited
Type of Instrument / Secured Redeemable NCDs and Unsecured Redeemable NCDs
Public Issue by the Company of Secured NCDs and Unsecured NCDs aggregating upto Rs. 2,500 million with an
Issue / option to retain over‐subscription upto Rs. 2,500 million for issuance of additional Secured NCDs and Unsecured
NCDs aggregating to a total of upto Rs. 5,000 million. The Unsecured NCDs will be in the nature of Subordinated
Debt and will be eligible for Tier II capital.
Face Value (Rs.) / Rs. 1,000 per NCD
Issue Price (Rs.) / Rs. 1,000 per NCD
Nature of Instrument / Secured & Unsecured
Mode of Issue / Public issue
Minimum Application / Ten NCDs (Rs. 10,000) and in the multiple of One NCD thereafter
Size and in multiples
Listing / BSE
Rating / Instrument / Rating / Date of credit / Amount / Rating
agency / symbol / rating letter / rated / definition
CRISIL / NCDs / “CRISIL / November 18, / Rs. 5,000 / Instruments with this
including / AA‐ / 2015 / rating are considered
million / to have high degree of
Subordinated / /Stable”
Credit Rating / Rating of / safety regarding timely
Debt / servicing of financial
the Instrument
obligations. Such
instruments carry very
low credit risk.
The rating provided by CRISIL may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. These ratings are not a recommendation to buy, sell or hold securities and investors should take their own decisions. Please refer to pages 381 to 382 for rating letter and rationale for the above rating.
Senior (to clarify, the claims of the Secured NCD Holders shall be superior to the claims of any unsecured creditors,
subject to applicable statutory and/or regulatory requirements). The Secured NCDs would constitute secured
obligations of ours and shall rank pari passu inter se, present and future and subject to any obligations under
Seniority / applicable statutory and/or regulatory requirements, shall also, with regard to the amount invested, be secured by
way of first pari passu charge on the identified immovable property and a first pari passu charge on current assets,
book debts, loans and advances, and receivables including gold loan receivables, both present and future, of the
Company.
No security will be created for Unsecured NCD in the nature of Subordinated Debt
Put/Call Option / There is no put/ call option for the NCDs
Mode of Allotment & / NCDs will be issued in both physical (to the extent permitted) as well as dematerialised form. *** Trading in the
NCDs will however take place compulsorily in dematerialised form. Please note, however, that Applicants cannot
Trading
apply for Allotment of NCDs under Options VII, VIII, IX, X and XI in physical form.
Deemed Date of Allotment shall be the date as decided by the Board or the duly authorised committee of the
Deemed Date of / Board constituted by resolution of the Board dated July 25, 2011, and as mentioned on the Allotment Advice. All
Allotment / benefits under the NCDs including payment of interest will accrue to the NCD Holders from the Deemed Date of
Allotment. Actual Allotment may occur on a date other than the Deemed Date of Allotment.
Issue Opening Date / December 11, 2015
Issue Closing Date / January 11, 2016
PRODUCT NOTE – NCD
The Record Date for payment of interest in connection with the NCDs or repayment of principal in connection therewith shall be 15 days prior to the date on which interest is due and payable, and/or the date of redemption.
*The subscription list shall remain open at the commencement of banking hours and close at the close of banking hours for the period as indicated, with an option for early closure or extension by such period, as may be decided by the Board or the duly authorised committee of the Board constituted by resolution of the Board dated July 25, 2011. In the event of such early closure of or extension subscription list of the Issue, the Company shall ensure that notice of such early closure or extension is given to the prospective investors through an advertisement in a leading daily national newspaper on or before such earlier date or extended date of closure. Applications Forms for the Issue will be accepted only from 10:00 a.m. till 5.00 p.m. (Indian Standard Time) or such extended time as may be permitted by the BSE, on Working Days during the Issue Period. On the Issue Closing Date, Application Forms will be accepted only from 10:00 a.m. till 3.00 p.m. (Indian Standard Time) and uploaded until 5.00 p.m. (Indian Standard Time) or such extended time as may be permitted by the BSE.
SPECIFIC TERMS FOR EACH SERIES OF BONDS
Series / I / II / III / IV / V / VI / VII / VIII / IX / X / XIFrequency / Annually* / Annually* / Annually*
of Interest / Monthly* / Monthly* / Monthly* / NA / NA / NA / NA / NA
* / * / *
Payment
Minimum / Rs. 10,000 (10 NCDs)
Application
In Multiples / Rs. 10,000 (10 NCDs)
of
Face Value
of NCDs ( / Rs.1,000.00
Rs./ NCD)
Issue Price / Rs. 1,000.00
(Rs./ NCD)
Tenor / 24 / 36 / 60 / 24 / 36 / 60 / 400 days / 24 / 36 months / 60 / 87
months / months / months / months / months / months / months / months / months
Base
Coupon
Rate (% per
annum) for
all Category / 8.75% / 9.00% / 8.50% / 9.00% / 9.25% / 8.75% / NA / NA / NA / NA / NA
of Investors
(A)
Category I
‐Institution
Category II‐
Non / 8.75% / 9.00% / 8.50% / 9.00% / 9.25% / 8.75% / NA / NA / NA / NA / NA
Institutiona
l
Category III / 8.75% / 9.00% / 8.50% / 9.00% / 9.25% / 8.75% / NA / NA / NA / NA / NA
Individual
Additional
incentive
on Base
Coupon
Rate (%
per annum)
on
any Record
Date / 0.75% / 0.75% / 0.75% / 0.75% / 0.75% / 0.75% / NA / NA / NA / NA / NA
as
applicable
to
Category II
and
Category III
investors
(B)
PRODUCT NOTE – NCD
CouponRate
(Aggregate
of the Base
Coupon
Rate and
the
additional
incentive / 8.75% / 9.00% / 8.50% / 9.00% / 9.25% / 8.75% / NA / NA / NA / NA / NA
on the Base
Coupon
Rate on any
Record
Date as
applicable
to
Category I
Institution
Category II‐
Non / 9.50% / 9.75% / 9.25% / 9.75% / 10.00% / 9.50% / NA / NA / NA / NA / NA
Institutiona
l
Category III / 9.50% / 9.75% / 9.25% / 9.75% / 10.00% / 9.50% / NA / NA / NA / NA / NA
Individuals
Effective
Yield (per
annum) / 8.75% / 9.00% / 8.50% / 9.00% / 9.25% / 8.75% / 8.25% / 8.75% / 9.00% / 8.50% / 9.27%
***** for
Category I
Effective
Yield (per
annum) for
Category II / 9.50% / 9.75% / 9.25% / 9.75% / 10.00% / 9.50% / 9.00% / 9.50% / 9.75% / 9.25% / 10.02%
and
Category III
investors
Maturity
Amount/
Redemptio
n Amount / Rs.1000 / Rs.1000 / Rs.1000 / Rs.1000 / Rs.1000 / Rs.1000 / Rs.1091.0 / Rs.1182.6 / Rs.1295.0 / Rs.1503.6 / Rs.1903.0
(Rs./ NCD) / 6 / 6 / 33 / 6 / 8
on Maturity
for
Category I
Maturity
Amount/
Redemptio
n Amount
(Rs./ NCD) / Rs.1,000. / Rs.1,000. / Rs.1,000. / Rs.1,000. / Rs.1,000. / Rs.1,000. / Rs.1099.4 / Rs.1199.0 / Rs. / Rs.1556.3 / Rs.2000
on Maturity / 00 / 00 / 00 / 00 / 00 / 00 / 1 / 3 / 1321.95 / 5
for
Category II
and
Category III
Redemptio
n Date/
Maturity / 24 / 36 / 60 / 24 / 36 / 60 / 24 / 60 / 87
Date (from / 400 days / 36 months
months / months / months / months / months / months / months / months / months
Deemed
Date of
Allotment)
Unsecure
Nature of / d and
indebtedne / Secured and non‐convertible / non‐
ss / convertibl
e
*With respect to Options where interest is to be paid on a monthly basis, relevant interest will be calculated from the first day till the last date of every month during the tenor of such Secured NCDs, and paid on
the first day of every subsequent month. For the first interest payment for Secured NCDs under the monthly options, interest from the Deemed Date of Allotment till the last day of the subsequent month will be clubbed and paid on the first day of the month next to that subsequent month.
PRODUCT NOTE – NCD
** With respect to Options where interest is to be paid on an annual basis, relevant interest will be paid on each anniversary of the Deemed Date of Allotment on the face value of the Secured NCDs. The last interest payment under annual Options will be made at the time of redemption of the Secured NCDs.
***Subject to applicable tax deducted at source, if any
**** Please refer to Schedule A for details pertaining to the cash flows of the Company in accordance with the SEBI circular bearing number CIR/IMD/DF/18/2013 dated October 29, 2013.
***** On Options I, II and III, monthly interest payment is not assumed to be reinvested for the purpose of calculation of Effective Yield (per annum)
.
WHO CAN APPLYCategories / Category I / Category II / Category III
(“Institutional Portion “) / (“Non-Institutional Portion”) / (“Individual Category Portion”)
Reservation / 10% of Overall Issue Size / 10% of Overall Issue Size / 80% of Overall Issue Size
Portion
v Public financial institutions, / v Companies; / bodies corporate / v Resident Indian individuals and
statutory corporations, / and societies / registered / under / Hindu Undivided Families
commercial banks, co- / the applicable laws in India and / through the Karta.
operative banks and RRBs / authorised to invest in the NCDs;
and multilateral and bilateral / v Public/ / private / charitable/
development financial
religious / trusts / which / are
institutions which are
authorised to invest in the NCDs;
authorised to invest in the
v Scientific / and/or / industrial
NCDs;
v Provident funds, pension / research / organisations, / which
funds, superannuation funds / are authorised to invest in the
and gratuity funds, which are / NCDs;
authorised to invest in the / v Partnership firms in the name of
NCDs; / the partners;
v Alternative Investment / v Limited / Liability / Partnerships
Funds, subject to investment
formed and registered under the
conditions applicable to
provisions of the Limited Liability
them under the Securities
Partnership Act, 2008 (No. 6 of
and Exchange Board of
2009); and
India (Alternative Investment
Funds) Regulations, 2012;
v Resident Venture Capital
Funds registered with SEBI;
v Insurance Companies;
v State industrial development
corporations;
v Insurance funds set up and
managed by the army, navy,
or air force of the Union of
India;
v Insurance funds set up and
managed by the Department
of Posts, the Union of India;
v National Investment Fund;
and
v Mutual Funds.
Forms
PRODUCT NOTE – NCD
Disclaimer: