Sunday, 4 March 2012

Muthoot finance secured NCD March 2012 issue

Muthoot finance ltd issues Non Convertible Debentures which double your money in 66 months, a guaranteed 100% growth in 5.5 years. The Secured Non Convertible Debentures with a face value of Rs. 1000 per unit opened on 03rd March, 2012 and the issue closes on 17th March, 2012. Muthoot Finance, the largest gold loan providers in India issues this issue of non convertible debentures in purely Demat mode only. The minimum required investment is Rs. 5000 which is the face value of 5 units. The earlier issue of NCD by them was on 22nd December 2011 to 07th January, 2012. Details of the new NCD are as follows:-

NCD options: There are 4 options for this Muthoot finance secured NCD according to the period of maturity and interest rate. This is for 24 months, 36 months, 60 months and 66 months.

Interest rate: The interest rate of each option of Muthoot finance NCD varies from 13% per annum to 13.43%. For 24 months NCD the interest rate is 13% per annum, for 36 & 60months option the interest rate is 13.25% per annum. For 66 months NCD the interest is 13.43% and it is a cumulative option which the amount will be doubled in 66 months.

Interest payment: For 24 months, 36 months and 60m months NCD the interest will be paid out annually and for 66 months NCD the interest will be accumulated and the total amount will be paid out at maturity. This option offers 200% maturity value of investment. The investor will get double the investment on maturity.

Face value of One NCD: The face value on one unit of NCD in all option is Rs. 1000.

Minimum investment: The minimum investment in this Muthoot finance secured non convertible debenture is 5 units which costs a total amount of Rs. 5000.

Credit rating: the Muthoot finance NCD is rated by ICRA ‘[ICRA] AA-/Stable’ for an amount of upto ` 6,000 Million and CRISIL ‘CRISIL AA-/Stable’ for an amount of upto ` 6,000 Million.

Issue mode: The issue of secured Muthoot Finance NCD is completely on Demat mode and can transact through a trading account.

Redemption amount: The repayment of NCD will be on date of redemption with the face value of investment and any interest left over. For the 66 months cumulative option the redemption amount will be 2000 for each unit of NCD.

Issue size: The issue size of Muthoot finance secured NCD is 2500 million.

Muthoot finance NCD is attractive with the secured high interest rate, but the investor should go through the scheme information document and statement of additional information carefully before investing the NCD. Although it is debt investment with fixed return, the business they are handling, providing gold loan is risky one. You should keep in mind that the old slogan of investment “do not put all your eggs in one nest”– diversify your investment.

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