By Dominick Rodrigues
Kochi : Muthoottu Mini Financers Ltd.(“Muthoottu Mini”/ ‘MMFL’), announced here today the opening of its public issue of Secured and Unsecured Debentures (“NCDs”) of the face value of Rs. 1,000 each. The 14th NCD Issue opens on March 30, 2021 and closes on April 23, 2021, with an option of early closure or extension.
The 14th NCD Issue aggregates to Rs125 crore, with an option to retain over-subscription upto Rs. 125 crore, aggregating upto a total of Rs. 250 crore. The Issue offers various options for subscription of NCDs with coupon rates ranging from 9.00% – 10.25% p.a.
The terms of each options of NCDs offered under Issue Include: Net proceeds of the Issue will be utilized for the purpose of onward lending, financing, and for repayment/prepayment of principal and interest on borrowings of the Company (Atleast 75%) – and the rest (up to 25%) for general corporate purpose.
Addressing media virtually, Matthew Muthootu, MD, MMFL, said the company is a pioneer in gold loans business and was established as a +One Stop Financial Services Provider+ for the common man. “About 24,000 tonnes of gold is lying with family households and needs to be tapped for liquidity in requirements, including strategizing our investments in specific areas to cater to middle and lower class populations,’ he said.
Highlighting MMFL’s business as gold loan business (93.37%), microfinance (4.54%) and other businesses (2.09%), Muthootu said the present business figures were Rs 2,000 crores with increase targeted at Rs 3,500 crores including Rs four crore per branch.”There are no problems in servicing existing debt due to lots (40%-50%) of recurring customers,” he replied to a question.
Due to movement restrictions for customers during the pandemic, MMFL had made tie-ups with banks for customers to access online/gold loans etc, he said, adding that MMFL is planning to open new branches in Delhi, Mumbai while moving up further in North India. “Private equity is on the table and we hope to go public by 2025-26. But gold loans remain our strength as primary portfolio and we were ranked among top NFDCs nationally,” he noted
Describing this issue as the 5th issue this year, P Mathai, CEO, MMFL, said the company’s increasing rating in moving forward highlighted investor confidence. “One lakh new pledges are taking place every month. There is growth in gold loan business in rural and semi-urban markets for tapping potential large market gold loans,” he said.
To a question as to why the company was visiting the debt markets so frequently, Mathai said “We are getting good response from people due to the awareness about us. Investors are drawn to such NCDs because of the company’s good track record, high liquidity and external rating by India Rating as IND BBB/Stable,” he said, adding that the company maintained 804 branches with 3200 employees in 10 states and one Union Territory.
Reacting to questions about fluctuating gold prices, Mathai said the company had foreseen gold prices dropping and had therefore reduced the tenure of its gold products to 180 days and later to 90 days.
Ann Mary George, CFO, MMFL, said the company’s 2018 PAT stood at Rs 1,424 lakhs, Gross NPA ((2.00 percent of Assets), Financial Assets (1,75, 430.71 lakhs), and Capital Adequacy Ratio at 29.65 (20200.
As on 30th September 2020, MMFL had 3,69,019 gold loan accounts — predominately from rural and semi urban areas — aggregating to Rs 1825.55 crores, which accounted for 97.27% of its total loans and advances. Its net Non-Performing Assets for six-month period ended September 30, 2020 stood at 0.59%, lower from the March, 2020 reported net Non-Performing Assets of 1.34%.
The Secured and Unsecured NCDs offered through Prospectus dated March 25, 2021 are proposed to be listed on the BSE.
The Lead Manager to the Issue is Vivro Financial Services Private Limited. Vistra ITCL (India) Limited is the Debenture Trustee and Link Intime India Private Limited is the Registrar to the Issue.
Muthoottu Mini Financers Ltd was incorporated in 1998 as a systemically important non-deposit taking NBFC in the gold loan sector. The Company was an erstwhile part of a family business enterprise that was founded by Ninan Mathai Muthoottu in 1887 and is now spearheaded by Nizzy Mathew, Chairwoman & Whole-time Director and Mathew Muthoottu, Managing Director.
Muthoottu Mini Financiers Limited is a RBI registered non-deposit taking systemically important NBFC in the loan against gold financing sector, lending money against the pledge of household gold jewellery for over 2 decades. As on December 31, 2020 the Company had a network of 804 branches spread in the states of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Haryana, Maharashtra, Gujarat, Delhi and Goa and the union territory of Puducherry and employed 3,205 persons in its business operations.
