Muthoot Finance NCD issue opens today

Muthoot Finance, which lends against gold, said its Rs 500 crore secured non-convertible debentures (NCDs) that opened today for subscription will close on January 27 next year.

Muthoot is aiming to garner up to Rs 250 crore through NCDs, and has the option to retain an oversubscription of up to Rs 250 crore for issue of additional NCDs aggregating to a total of Rs 500 crore, as per the company's draft prospectus filed with Sebi.

NCDs are bonds issued by a company that cannot be converted into stock and usually offer higher interest rate than convertible debentures.

The non-convertible debentures have a face value of Rs 1,000 each and the subscription would close on January 27. The company would utilise the proceeds raised through the issue for various financing activities including lending and investments as well as to repay existing loans.

Besides, the company said it would use the funds "towards business operations including for our capital expenditure and working capital requirements."

ICICI Securities is the lead manager to the company's issue. The NCDs offered are proposed to be listed on the BSE.

Muthoot Finance is one of the largest providers of gold loans in India, with over 4,400 branches across the country.