Muthoottu Mini NCD Oct. 24 issue review (May apply)

• MMFL is a Muthoottu Mini group arm engaged in gold loan and other financial services.
• This is the 18th offer from this company since February 2014.
• Last debt offer was in the month of April 2022.
• Issue rated as CARE A-/Stable. Such rating indicates low credit risk in servicing.
• This time it has further increased the coupon rates with improved credit rating.
• Investors looking for steady regular income may park moderate funds.

ABOUT COMPANY:
Muthoottu Mini Financiers Ltd. (MMFL) a Muthoottu Mini group company is a non-deposit taking systemically important NBFC in the gold loan sector lending money against the pledge of household gold jewellery ("Gold Loans") in the state of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Haryana, Maharashtra, Gujarat, Delhi and Goa and the union territory of Puducherry.

The company also has microfinance loan segment wherein it provides unsecured loans to joint liability group of women customers (minimum of 5 persons) who require funds to carry out their business activities through few of its branches in the state of Kerala.

MMFL, as of September 30, 2024, had a network of 920 branches spread in the states of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Haryana, Maharashtra, Gujarat, Delhi, Uttar Pradesh and Goa and the union territory of Puducherry and it employed 4,672 persons in business operations.

ISSUE DETAILS:
For the purpose of onward lending and for repayment of interest and principal of existing loans (at least 75%) and also for general corporate fund needs (up to 25%), MMFL is coming out with its debt offer of secured, redeemable, non-i.e. Rs 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE. MMFL is spending Rs. 2.30 cr. for mobilizing Rs. 150 cr.

Vivro Financial Services Pvt. Ltd. is the sole lead manager for this offer. Mitcon Credentia Trusteeship Services Ltd. is the debenture trustee while Link Intime India Pvt. Ltd. is the registrar to the issue.

This issue has tenure of 450 days, 26 months, 36 months, 48 months and 66 months. It is offering coupon rates ranging from 8.50% to 10.00%. Interest payments mode is Monthly or Cumulative as per the choice of investors. The company has raised the coupon rates with a little higher credit rating.

CREDIT RATING:
Issue is rated CARE A-/Stable by Care Ratings Ltd. It indicates that instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations and carry low credit risk. These ratings are not a recommendation to buy, sell or hold securities and investors should take their own decisions. The rating given CARE Ratings is valid as on the date of this Prospectus and shall remain valid on date of the issue and allotment of NCDs and the listing of the NCDs on BSE. These ratings are subjected to a periodic review during which it may be affirmed, changed, suspended, withdrawn, or placed on rating watch, based on one or more specific events.

FINANCIAL PERFORMANCE:
For the last three fiscals, MMFL has posted total income/net profit of Rs. 430.25 cr. / Rs. 46.29 cr. (FY22), Rs. 544.44 cr. / Rs. 67.28 cr. (FY23), Rs. 671.84 cr. / Rs. 77.83 cr. (FY24). For the Q1 of FY25 ended on June 30, 2024, it has earned net profit of Rs. 23.52 cr. on a total income of Rs. 186.57 cr. The company has posted steady growth in its top and bottom lines for the reported periods.

As of June 30, 2024, its Net NPAs stood at 0.56% against 0.72% for FY24. Its current debt equity ratio of 5.10 as of March 31, 2024, will stand enhanced to 5.31 post this issue.

Conclusion / Investment Strategy

This is a frequent debt market visitor company bringing its 18th offer since February 2014 and has changed its LM, Rating Agency, Trustee in the past. For this issue it has hiked the coupon rates with improved credit rating. Investors looking for steady income may park moderate funds as per their appetite.

Review By Dilip Davda on October 25, 2024

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

About Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

(Dilip Davda -SEBI registered Research Analyst-Mumbai,

Registration no. INH000003127 (Perpetual)

Email id: dilip_davda@rediffmail.com ).

The Muthoottu Mini Financiers NCD October 2024 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if Muthoottu Mini Financiers NCD October 2024 worth investing. The Muthoottu Mini Financiers NCD October 2024 Note sets the NCD expectations in systematic way which tells you if Muthoottu Mini Financiers NCD October 2024 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Muthoottu Mini Financiers NCD October 2024 by providing NCD recommendations i.e. subscribe, avoid and neutral.

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Muthoottu Mini NCD Oct. 24 issue review (May apply)

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