Muthoot Microfin Limited , a prominent player in the microfinance sector, has taken a significant step to bolster its financial position. The company's Debenture Issue and Allotment Committee has approved the issuance of non-convertible debentures (NCDs) on a private placement basis, aiming to raise up to ₹75.00 crore with an additional green shoe option of ₹45.00 crore.

Debenture Details

The approved issuance comprises up to 7,500 listed, rated, senior, secured, transferable, and redeemable non-convertible debentures. Each debenture carries a face value of ₹1,00,000, bringing the total potential raise to ₹75.00 crore. Key features of the debentures include:

• Tenure: 36 months
• Coupon Rate: 9.80% per annum
• Payment Schedule: Monthly
• Listing: To be listed on BSE Limited

Security and Structure

The principal amount of the debentures will be secured by a first ranking exclusive charge of 1.10 times over the company's receivables. This structure provides an additional layer of security for investors, potentially making the offering more attractive in the debt market.

Regulatory Compliance

The decision to issue these debentures was made during a meeting of the Debenture Issue and Allotment Committee. The company has duly informed the stock exchanges about this development, in compliance with Regulation 50(1) & 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Market Implications

This move by Muthoot Microfin Limited indicates the company's strategy to leverage debt financing for its operations. The issuance of NCDs can provide the company with necessary capital while offering investors a fixed-income investment opportunity. The coupon rate of 9.80% may appeal to investors seeking steady returns in the current market environment.

Conclusion

As Muthoot Microfin Limited proceeds with this debenture issuance, market participants will be keen to observe the uptake and subsequent utilization of funds. This development underscores the company's proactive approach to capital management and its commitment to exploring diverse funding avenues to support its business objectives in the microfinance sector.

Muthoot Microfin has successfully raised ₹100 crore through the allotment of Non-Convertible Debentures (NCDs) on a private placement basis. The company made this announcement in a regulatory filing on September 12, 2023.

Key Details of the NCD Allotment

• Number of NCDs: 1,00,000 (One Lakh)
• Face Value: ₹10,000 per NCD
• Total Amount Raised: ₹100.00 crore
• Nature of NCDs: Listed, Rated, Senior, Secured, Transferable, and Redeemable
• Allotment Date: September 12, 2023

Approval and Execution

The allotment was approved by Muthoot Microfin's Debenture Issue and Allotment Committee during a meeting held on September 12, 2023. This decision follows the company's earlier intimation regarding the issuance of these debentures, which was communicated on September 3, 2023.

Regulatory Compliance

The company has made this disclosure in compliance with Regulations 30 and other applicable regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended. The information was shared with both the BSE Limited and the National Stock Exchange of India Limited, where Muthoot Microfin's shares are listed.

Significance of the Move

This successful NCD allotment represents a strategic financial move for Muthoot Microfin. By raising ₹100.00 crore through private placement, the company has bolstered its capital position, which could potentially be used for various purposes such as expanding its microlending operations, strengthening its balance sheet, or funding other business initiatives.

The secured and rated nature of these NCDs may have made them attractive to investors, allowing the company to raise funds. However, specific details about the interest rates, tenure, and use of proceeds were not disclosed in the regulatory filing.

Upcoming Committee Meeting

In a recent development, Muthoot Microfin Limited has scheduled a meeting of its Debenture Issue and Allotment Committee on September 17, 2023. The purpose of this meeting is to consider and approve fund raising through the issuance of additional Non-Convertible Debentures on a private placement basis. The company has duly informed both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) about this scheduled committee meeting.

This upcoming meeting suggests that Muthoot Microfin is exploring further opportunities to strengthen its financial position through debt instruments, following the successful ₹100 crore NCD allotment earlier this month.