Looking for stable returns with high credit quality? Consider investing in Muthoot Finance NCDs. Enjoy attractive interest rates, regular income, and the safety of a highly rated issuer. To learn more, continue reading.
In the dynamic world of investments, where markets can swing like a pendulum, Non-Convertible Debentures (NCDs) offer a comforting sense of stability. They are essentially fixed-income instruments issued by companies to raise capital, promising to pay investors a fixed interest rate over a specific period. Unlike convertible debentures, NCDs cannot be converted into equity shares, making them a pure debt investment.
About Muthoot Fincorp
The flagship company of the Muthoot Pappachan Group, Muthoot Fincorp has over 136+ years of legacy from its parent company. Muthoot Fincorp is a leading NBFC in India with over 3600 branches all over India. Their customer base is more than 20 Lakh, they have disbursed more than Rs. 40,000 Crores of loans in previous financial year.
They are known for their gold loans, but also offer a wide range of financial products and services, including:
- MSME loans
- Affordable Housing Loans
- Two-wheeler & Used Car loans
- Money Transfer
- Microfinance
- Wealth Management Services
- Foreign exchange (authorized dealer category)
- Insurance services (through group companies)
Details of Muthoot Fincorp Tranch I NCD
This Public NCD issue has base issue size of ₹ 10,000 lakhs with an option to retain over-subscription up to ₹ 25,000 lakhs aggregating up to ₹ 35,000 lakhs.
| Title | Details |
| Issue opens | Wednesday, August 28, 2024 |
| Issue closes | Tuesday, September 10, 2024 |
| Allotment | First Come First Serve Basis |
| Face Value | Rs.1,000 per NCD |
| Issue Price | Rs.1,000 per NCD |
| Nature of Instrument | Secured Redeemable Non-Convertible Debentures |
| Minimum Application | 10 NCDs (Rs.10, 000) & in multiple of 1 NCD thereafter |
| Tenure | 24, 36, 60, 72, and 92 Months |
| Interest Payment frequency | Monthly, Annually, and Cummulative |
| Listing | BSE |
| Lead Manager To The Issue | Nuvama Wealth Management Limited |
| Deemed date of Allotment | As per notification |
| Rating | CRISIL AA-/Stable |
Attractive Interest Rates (Effective Yield)
For the 72-month term (6 years), they are offering an effective yield of 10.10% for both the annual and cumulative interest options. However, if you choose the monthly interest payout option for the same term, your effective yield will be slightly lower at 10.09%%.
Double your investment by parking it for a tenure of 92 months (7.67 years).
See the tables below for effective yields for other terms:
Monthly Interest Payment Frequency
| Tenure | 24 | 36 | 60 | 72 |
| Coupon | 9.00% | 9.25% | 9.45% | 9.65% |
| Effective Yield | 9.38% | 9.65% | 9.87% | 10.09% |
Yearly Interest Payment Frequency
| Tenure | 24 | 36 | 60 | 72 |
| Coupon | 9.40% | 9.65% | 9.90% | 10.10% |
| Effective Yield | 9.40% | 9.65% | 9.89% | 10.10% |
Cumulative Payment
| Tenure | 24 | 36 | 60 | 72 | 92 |
| Effective Yield | 9.40% | 9.65% | 9.90% | 10.10% | 9.50% |
Key Considerations Before Investing
- Credit Rating: Assess the credit rating of the issuing company. Higher-rated NCDs offer lower risk but may also have lower interest rates.
- Interest Rate and Maturity: Evaluate the interest rate offered and the maturity period to ensure they align with your investment goals and liquidity needs.
- Call/Put Options: Some NCDs come with call or put options that give the issuer or investor the right to redeem or sell the NCD before maturity. Understand these features before investing.
- Market Risk: While NCDs are less volatile than equities, their prices can fluctuate in the secondary market due to changes in interest rates and credit spreads.
In Conclusion
NCDs play a crucial role in creating a well-balanced portfolio, providing stability, regular income, and diversification benefits. They are particularly suitable for risk-averse investors and those seeking a steady income stream. However, careful research and due diligence are essential before investing in any NCD, as the creditworthiness of the issuer and the terms of the instrument can significantly impact your returns.
How to Invest?
Don’t miss out on this opportunity to lock in high returns! Limited NCDs available. Contact us today to invest in Muthoot Finance NCDs and start building your wealth.
