Started in 1997, Muthoot Fincorp Limited is a non-deposit taking NBFC. The company is primarily engaged in the business of offering personal and business loans which are secured by gold ornaments and jewellery. Company emerged as a prominent gold loan player with 75% growth in its gold loan portfolio upto Rs 39,700 lakhs in FY 2011 From FY2016 to FY2021, Muthoot Fincorp has shown a significant increase in its Gold Loan Portfolio at a compound annual growth rate of around 15 %. The personal and business loans secured by gold jewellery and ornaments ('Gold loans') offered by the Company are structured to serve the business and personal purposes of individuals who do not have ready or timely access to formal credit or to whom credit may not be available at all, to meet unanticipated or other short-term liquidity requirements. The Gold loan portfolio of our Company as of September 30, 2021 comprised approximately 36.18 lakhs loan accounts. As of September 30, 2021, our Company operated out of 3658 branches located across 24 states, including union territory of Andaman and Nicobar Islands and the national capital territory of Delhi and employed 17,013 employees including 233 contracted experts in its operations. Some of the Gold Loan products offered by the company are: 1. Muthoot Blue Guide Gold loan 2. Muthoot Blue Bright Gold loan 3. Muthoot Blue Power Gold loan 4. Muthoot Blue Big Gold loan 5. Muthoot Blue Smart Gold loan 7. 24x7 Express Gold loan In addition to the Gold loan business, the Company provides foreign exchange conversion and money transfer services as sub-agents of various registered money transfer agencies. Muthoot Fincorp is also engaged in the following business: 1. Generation and sale of wind energy through its wind farms located in Tamil Nadu; and 2. Real estate business through joint venture developers of the company-owned land parcels. On the financial performance front, for the last three fiscals, MFL has (on a consolidated basis) posted total revenue/net profits of Rs. 3353.76 cr. / Rs. 372.61 cr. (FY19) and Rs. 3765.99 cr. / Rs. 257.93 cr. (FY20) and Rs. 4101.19 cr. / Rs. 397.28 cr. (FY21). Despite the surge in total income, it has suffered a setback in FY20 in line with general market trends. Its Net NPAs as of March 31, 2021, was at 1.01% against 0.62% as of March 31, 2020. As of September 30, 2021, its net NPA stood at 1.64%. This raises a concern. The issue is rated CRISIL A+ / Stable by CRISIL Ltd. This rating indicates that instruments with this rating are considered to have a adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. Coupon rates offered by company is attractive in current time as interest rates are low. So we give SUBSCRIBE rating to this NCD offer.
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