Gold loan company Muthoot Finance Ltd (MFL) plans to launch a non-convertible debenture (NCD) issue in the July-September quarter.
Plans are afoot to raise as much as Rs 1,400 crore this fiscal from the retail segment through listed NCDs, Mr George Alexander Muthoot, Managing Director, Muthoot Finance, told Business Line .
He said the company was looking at several tranches — likely to be two or three — of the listed NCDs to mobilise Rs 1,400 crore. Even in 2011-12, Muthoot Finance had raised Rs 1,400 crore through NCDs, but in three tranches — August 2011, January and March 2012.
Diversifying resources
The company has in recent years been diversifying its resource avenues and not relying entirely on banks.
On profits, Mr Muthoot said the company was hopeful of maintaining profits at the same level as last fiscal, but was unlikely to record any big jump in bottomline.
Part of the reason for lower ambition on profits could be the fact that the company is in “consolidation mode” this fiscal.
Muthoot Finance is looking to add 250 branches this fiscal against about 900 branches added last year. “We want the regulators and others to understand our business model better,” he said, indicating that company was consciously looking to slow down in the wake of certain regulatory directives by the RBI against gold loan companies.
In fact, the first three months of the current fiscal had seen a de-growth of 3-5 per cent in the assets under management, Mr Muthoot said.
The RBI had in February this year clamped down on gold loan companies by bringing down the loan-to-value ratio to 60 per cent.
It had also asked banks to reduce exposure to gold loan companies from 10 per cent to 7.5 per cent of their net owned funds.
Last year, RBI had removed priority sector status from gold loan companies. This had led to higher cost of borrowing for such companies.