Kosamattam Finance Ltd is a Kerala Based non-deposit taking NBFC engaged in the gold loan finance business. It is a part of Kosamattam Group. The company provides its services in Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Delhi, Maharashtra, Gujarat and Telangana along with the Union Territory of Puducherry. In addition to Gold Loans, it also offers fee-based ancillary services like microfinance, money transfer services, foreign currency exchange, power generation, agriculture and air ticketing services. Kosamattam Finance is headquartered in Kerala and has a vast network of 923 branches and employs 3,214 persons in its business operations. The Gold Loan portfolio of the company for the financial years ending in 2018, 2017, and 2016 comprised of Rs. 2,05,050.99 lakhs, Rs. 1,73,040.27 lakhs and Rs. 1,31,224.42 lakhs, respectively, constituting 91.56%, 90.03% and 89.12% of the total loans portfolio of the company. The company is offering Secured redeemable non-convertible debentures of Rs. 1000 each. It opens for subscription on 23.08.18 and will close on or before 21.09.18. Minimum application is to be made for 10 NCDs and in multiple of 1 NCD thereon, thereafter. The offer has the tenure of 24 months, 36 months, 48 months, 60 months and 84 months and interest payment modes cumulative, yearly or monthly as per the choice of investors. Coupon rates vary from 9.75% to 10.25%. Although coupon rates are lucrative, its poor grading makes is a bit risky. Post issue its debt-equity ratio will stand enhanced from 6.61 to 7.36. Funds mobilized through this issue will be used for onward lending as well repayment of existing loans with interest thereon. On the performance front, for the fiscal years ended March 31, 2018, March 31, 2017, March 31, 2016, March 31, 2015, and March 31, 2014, KFL's total income was Rs. 430.61 cr., Rs. 352.25 cr. Rs. 345.70 cr., Rs. 257.54 cr. and Rs. 261.87 cr. respectively. Its profit after tax the for these FYs was Rs. 30.82 cr., Rs. 15.68 cr., Rs. 11.23 cr. Rs. 5.28 cr. and Rs. 26.45 cr. respectively. It suffered a severe setback in FY15 and thereafter, it has posted gradual growth in its business. It had gross/net NPAs of 0.98%/0.59% (FY18), 0.57%/0.27% (FY17) and 0.45%/0.20% (FY16). The issue is rated IND BBB (outlook stable) by India Rating & Research Pvt. Ltd. This rating indicates that instruments with this rating are considered to have a moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk.
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