Tag: Thomas John Muthoot

CRISIL upgrades Muthoot FinCorp’s rating to A+

Banking & Finance

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CRISIL has upgraded its rating of Muthoot FinCorp Ltd from ‘ A’ (Stable) to ‘A+ (Stable)’.

The CRISIL rating upgrade underscores a high degree of safety regarding the timely servicing of the company’s NCDs (non-convertible debentures) — they carry very low credit risk, a statement issued here said.

Thomas John Muthoot, Chairman and Managing Director, said: “The rating upgrade by CRISIL is very significant in strengthening the confidence of our lenders and retail investors. The upgrade will also enable the company to widen its retail and corporate investor base.”

The rating signals that Muthoot FinCorp’s business profile will continue to be supported by its established market position in the gold loan segment, strengthened by the promoters’ extensive experience in the gold loan industry, healthy asset quality, and improving earnings profile in the gold loan portfolio, he said.

During the financial year, the company, through three public issues, has raised NCDs to the tune of ₹1,138.59 crore. In addition, the company issued NCDs via private placement to banks amounting to ₹1,750 crore and raised market-linked debentures (MLD) of ₹997 crore.

The company’s gold loan business AUM (assets under management) grew 24 per cent during the last three-quarters of the current fiscal. It is expected to grow by 28 per cent for FY2020-21. The company has maintained healthy asset quality over the years, as reflected in its gross non-performing assets of 1.0-1.8 per cent under the gold loan portfolio being maintained during the past five fiscals.

In the current financial year, MFL has disbursed about ₹38,000 crore to 75 lak customers, of which 45 lakh are nano, micro or small enterprises.

The rating upgrade is the reflection of the company’s healthy performance in its core gold loan portfolio, its established position in the country’s gold loan business, its strong fundamentals, its healthy performance manifested by steady growth in assets under management, sound asset quality and increased earnings profile, the company claimed.

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Muthoot Fincorp launches NCDs to raise ₹200 cr

Banking & Finance

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Muthoot Fincorp, flagship company of Muthoot Pappachan Group (known as Muthoot Blue), on Friday launched its eighth public issue of secured and unsecured redeemable non-convertible debentures (NCDs) to raise ₹200 crore with an option to retain over subscription up to ₹200 crore, aggregating to ₹400 crore.

The funds raised will primarily be used to augment the working capital and requisite lending, said Thomas John Muthoot, Chairman, Muthoot Pappachan Group, and Managing Director, Muthoot Fincorp.

Board approval

The company has received board approval to raise NCDs through public issue in the aggregate amount of up to ₹1,500 crore. The first tranche of the issue with a face value of ₹1,000 each and minimum ticket size of ₹10,000 (10 NCDs), had opened on September 28, 2020 and closed on October 23, 2020.

Also read: Muthoot Finance to raise ₹1,000 crore through NCDs

“The second tranche of the issue with the face value of ₹1,000 and a minimum ticket size of ₹10,000 (10 NCDs) opens now and is scheduled to close on January 25, with an option of early closure or extension in compliance to SEBI debt regulations,” Thomas John Muthoot said.

Demand for gold, MSME loans

There will be nine options with tenure options of 27 months, 38 months and 60 months for the secured NCDs, and a tenure option of 72 months for the unsecured NCDs, offering returns with interest rates ranging from 8.25 per cent to 9.40 per cent. The issue has received credit rating ‘CRISIL A/Stable’ from Crisil.

“Muthoot Fincorp has a diversified portfolio of products that is responsibly designed to empower our customers for their lifecycle needs. In the prevailing market conditions, especially when Indian economy is restarting, we have been experiencing a spike in demand for gold and MSME loans,” Thomas John Muthoot pointed out.

Working capital needs

“In order to enable nano, micro, and small businesses, our target customers, rebound, the company needs the infusion of more working capital and hence the decision to go for an NCD issue. The first tranche was received well by our investors, and we managed to raise ₹397.14 crore,” he said.

Also read: Muthoot Finance to be added to MSCI India domestic index

Muthoot Fincorp, along with sister companies, has lakhs of customers actively engaged with it on a day-to-day basis. “We are confident about the success of this NCD issue, and hope that this will further fuel growth in the economy and add more value to stakeholders, including our investors,” Thomas John Muthoot added.

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