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Muthoot Finance Ltd, the largest gold financing company in India in terms of loan portfolio, will raise up to Rs 1,000 crore through a public issue of secured redeemable non-convertible debentures (NCDs) opening on August 23, 2011.

The face value of the NCDs will be Rs1,000 each, aggregating up to Rs 500 crore with an option to retain over-subscription up to Rs 500 crore, aggregating to a total of up to Rs 1,000 crore.

The funds raised through this Issue will be then utilised by the company for various financing activities, including lending and investments, to repay existing liabilities or loans, and towards business operations.

Muthoot Finance went public early this year after raising around Rs 900 crore in the public issue.

The NCD Issue comes with three investment options (with maturity date of 24, 36 and 60 months) and an effective yield of up to 12.25 per cent (per annum). It closes on September 5, 2011, although there is an option of early closure.

The minimum application will be for five NCDs (Rs 5,000). The NCDs are proposed to be listed on the National Stock Exchange of India Ltd (NSE) and the Bombay Stock Exchange Ltd (BSE).

The company’s gold loan portfolio, as of March 31, 2011, comprised of approximately 4.7 million loan accounts in India and as of June 30, 2011, it employed 19,125 people and had a network of 2,997 branches.

The lead managers to the NCD issue are ICICI Securities, HDFC Bank, JM Financial, Kotak Mahindra Capital and Yes Bank, while the co-lead managers to the Issue are Karvy Investor Services Ltd and RR Investors Capital Services Pvt Ltd. 

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