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

The company aims to garner up to Rs 250 crore through NCDs, and would have the option to retain an over-subscription of up to Rs 250 crore for issue of additional NCDs aggregating Rs 500 crore, as per the company’s draft prospectus filed with SEBI.

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

Muthoot Finance’s public issue of ‘secured redeemable NCDs’ and ‘unsecured redeemable NCDs’ are of face value of Rs 1,000 each.

The company would utilise the proceeds raised through the issue for various financing activities, including lending and investments as well as to repay the 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. The entity employs about 25,000 people in over 4,400 branches across the country.

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