1 Public Issue of Secured and Unsecured Redeemable Non- Convertible Debentures of Rs. 15,000 Lacs with an option to retain over subscription upto Rs. 15,000 Lacs aggregating to Rs. 30,000 Lacs by MUTHOOTTU MINI FINANCIERS LIMITED BACKGROUND OF THE COMPANY Muthoottu Mini Financiers Ltd. (MMFL / Company), headquartered in the southern Indian state of Kerala, is registered with RBI as a non-deposit taking, systemically important, NBFC, lending money against pledge of used household gold jewellery ( Gold Loans ) in the state of Kerala, Tamil Nadu, Karnataka, Andh ra Pradesh, Delhi, Goa, Haryana, Maharashtra and Uttar Pradesh. It also provides short-term personal loans primarily to individual customers who require immediate availability of funds. The Company belongs to the Muthoottu Mini Group which is headed by Mr. Roy M. Mathew who belongs to the Muthoottu Family of Kozhencherry, which was founded by Mr. Ninan Mathai Muthoottu, who started the family business enterprise in The Group has been in the gold loan financing since 1986 and the Company has been extending Gold Loans since As on August 31, 2014, MMFL is having a branch network of 1,053 branches spread in the states of Kerala, Karnataka, Tamil Nadu, Andhra Pradesh, Goa, Delhi, Haryana, Maharashtra and Uttar Pradesh. The Gold Loan portfolio of MMFL as of March 31, 2014 is comprised of 2,75,895 gold loan accounts, aggregating Rs. 1,76, Lacs which is 94.80% of the total loans and advances. As of March 31, 2014, 2013 and 2012, the Assets under management was Rs. 1,86, Lacs Rs. 1,83, Lacs, Rs. 1,16, Lacs respectively. Gross non-performing gold loan assets were 0.71%, 0.36% and 0.19% of gross portfolio under management as of March 31, 2014, 2013 and 2012 respectively. In the FY 2014, the average loan amount advanced by MMFL was Rs. 35,041 per loan transaction and the average tenor per loan for the said period was 101 days. All of the Gold Loans have a term of 12 months. In the financial year ended March 31, 2013, the yield on Gold Loan assets was 19.10%. In addition to the loan business, Company also offers depository participant services, money transfer services and insurance broking services. COMPETITIVE STRENGTHS & KEY STRATEGIES Competitive Strengths Doing business in southern India with a long operating history and large customer base Flexible loan schemes, efficient customer service and short response time Extensive branch network across rural and semiurban areas in South India Advanced technology systems and established processes Robust support system, including appraisal, internal audit and inventory control and safety systems Experienced management team and skilled personnel Key Strategies Further growth in gold loan business in rural and semi-urban markets Diversifying the business into metros and select Tier 1 cities across India Expanding the visibility of the Muthoottu Mini Brand to attract new customers Undertaking new business initiatives to diversify revenue stream by leveraging branch network and customer base Strengthening risk management, loan appraisal and technology systems to have an error less streamlined growth in business
2 FINANCIAL INFORMATION Profit & Loss Account Items (Rs. in Lacs) Particulars Total Income 35, , , , Profit Before Tax 4, , , Profit After Tax 3, , , Yield on Earning Assets (%) Net Interest Margin (%) Balance Sheet Items (Rs. in Lacs) Particulars March 31, 2014 March 31, 2013 March 31, 2012 March 31, 2011 Equity Share Capital 22, , , , Reserves & Surplus 19, , , , Non- Current Liabilities 69, , , , Current Liabilities 117, , , , Fixed Assets (Net) 15, , , , Non- Current Assets 2, , , , Current Assets 211, , , , Assets Under Management 186, , , , Return on Net worth (%) Net NPA (%) Capital Adequacy Ratio (%) OBJECTS OF THE ISSUE Our Company is in the business of gold loan financing and as part of our business operations, we raise/avail funds for onward lending and for repayment of interest and principal of existing loans. The following table details the objects of the Issue and the amount proposed to be financed from the Net Proceeds: Sr.No Objects of the Fresh Issue Percentage of amount proposed to be financed from Issue Proceeds 1. Onward lending and for repayment of interest and atleast 75% principal of existing loans 2. General Corporate Purposes* upto 25% Total 100% *The Net Proceeds will be first utilized towards the Objects mentioned above. The balance is proposed to be utilized for general corporate purposes, subject to such utilization not exceeding 25% of the amount raised in the Issue, in compliance with the Debt Regulations.
3 ISSUE DETAILS Issuer Lead Manager Muthoottu Mini Financiers Limited Registered Office: 2/994, Muthoottu Buildings, Kozhencherry, Pathanamthitta Tel.: ; Fax: Corporate Office: Mini Muthoottu Tech Towers, Kaloor, Cochin Tel.: ; Fax: Website: Vivro Financial Services Private Limited Registrar 607/608, Marathon Icon, Opp. Peninsula Corporate Park, Off. Ganpatrao Kadam Marg, Veer Santaji Lane, Lower Parel, Mumbai Tele: Fax: Investor Grievance Website: Contact Person: Keval Gandhi Compliance Officer: Jayesh Vithlani SEBI Registration No.: INM CIN : U67120GJ1996PTC Debenture Trustee Link Intime India Private Limited IL&FS Trust Company Limited Issue Schedule Issue Opens on 29 th September, 2014 Issue Closes on 28 th October, 2014* Issue Size Base issue size of Rs. 15,000 Lacs, with an option to retain oversubscription of Rs. 15,000 Lacs, aggregating to a total of Rs. 30,000 Lacs. Nature of Instrument Credit Rating Mode of Allotment Listing Trading Company shall ensure that Secured NCDs shall be allotted for a value upto Rs. 20,000 Lacs and Unsecured NCDs shall be allotted for a value upto Rs. 15,000 Lacs subject to the total issue size not exceeding Rs. 30,000 Lacs. Secured and Unsecured, Redeemable Non-Convertible Debentures. The Unsecured Redeemable Non-Convertible Debentures will be in the nature of Subordinated Debt and will be eligible for Tier II Capital BB+ [Double B Plus] by IND-RA In Dematerialized form and Physical form, at the option of the Applicant BSE Limited In Dematerialized form only Face Value (Rs. / NCD) Rs. 1,000/- Issue Price (Rs. / NCD) Rs. 1,000/- Minimum Application In multiples of Rs. 10,000/- or 10 NCDs (for all Series of NCDs either taken individually or collectively) One NCD after the Minimum Application
4 Allocation Seniority Category I (Institutional)- 10% of the overall issue size Category II ( Non - Institutional) - 30% of the overall issue size Category III (Retail Individual) - 60% of the overall issue size Senior (the claims of the Debenture Holders holding S ecured NCDs shall be superior to the claims of any unsecured creditors, including the Unsecured NCDs, subject to applicable statutory and/or regulatory requirements). The Secured NCDs would constitute secured obligations of our Company and shall rank pari passu inter se, present and future and subject to any obligations under applicable statutory and/or regulatory requirements, shall also, with regard to the amount invested, be secured by way of first pari passu charge on immovable property located at Chennai, Tamil Nadu and first pari passu charge on current assets, book debts, loans and advances, and receivables, both present and future, of our Company, except those receivables specifically and exclusively charged in favour of the Existing Lenders and to be more particularly described in the Secured Debenture Trust Deed. Security Depositories Pay- in Date Record date Claims of all other lenders shall rank higher than Unsecured NCDs in the nature of Subordinated Debt. The principal amount of the Secured NCDs to be issued in terms of the Prospectus together with all interest due on the NCDs, as well as all costs, charges, all fees, remuneration of Debenture Trustee and expenses payable in respect thereof shall be secured by way of first pari passu charge on immovable property located in Chennai, Tamil Nadu and first charge on current assets, including book debts, loans and advances, cash and bank balance and receivables, both present and future, of our Company ranking pari passu with the existing debenture holders holding Secured NCDs of our Company, more particularly described in the Secured Debenture Trust Deed, except those receivables specifically and exclusively charged in favour of the Existing Lenders. No security will be created for Unsecured NCD in the nature of Subordinated Debt NSDL and CDSL Three (3) Business Days from the date of upload of application in the book building system of the Exchanges or the date of realisation of the cheques/demand drafts, whichever is later. Interest on Application Money shall start on the Pay-in date and shall be payable upto one day prior to the date of Allotment. The record date for payment of interest in connection with the NCDs or repayment of principal in connection therewith shall be 7 days prior to the date on which interest is due and payable, and/or the date of redemption. Provided that trading in the NCDs shall remain suspended between the aforementioned Record Date in connection with redemption of NCDs and the date of redemption or as prescribed by the Stock Exchanges, as the case may be. In case Record Date falls on a day when stock exchanges are having a trading holiday, the immediate subsequent trading day will be deemed as the Record Date. *The subscription list for the Issue shall remain open for subscription upto 5pm,with an option for early closure, as may be decided at the discretion of the duly authorised committee of Directors of our Company subject to necessary approvals. In the event of such early closure of the Issue our Company shall ensure that notice of such early closure is given on or before such early date of closure through advertisement/s in a leading national daily newspaper. For further details please refer to General Information Issue Programme on page 37 of the Prospectus.
5 INVESTMENT DETAILS Tenure 18 months 36 months 42 months 66 months Nature Secured Secured Secured Unsecured Options I II III IV V VI VII Frequency of Interest Payment Monthly Cumulative Monthly Cumulative Monthly Annual Cumulative Minimum Application 10 NCDs ( ` 10,000) (across all options of NCDs) In Multiples of 1 NCD after the minimum application Face Value of NCDs (`/ ` 1,000 NCD) Issue Price (` / NCD) ` 1,000 Mode of Interest Through Various options available Payment/Redemption Coupon (%) per annum in 11.50% NA 11.75% NA 12.00% 12.75% NA Category I, II & III Coupon (%) for Existing 11.75% NA 12.00% NA 12.25% 13.00% NA Debenture Holders, Exservicemen and Senior Citizen Coupon Type Fixed Redemption Amount 1,000 1,171 1,000 1,500 1,000 1,000 2,000 (`/NCD) for Debenture Holders in Category I, II & III Redemption Amount 1,000 1,175 1,000 1,500 1,000 1,000 2,000 (`/NCD) for Existing Debenture Holders, Exservicemen and Senior Citizen Effective Yield 12.13% 11.75% 12.40% 12.28% 12.68% 12.75% 13.43% (per annum) Effective Yield (per annum) for Existing Debenture Holders, Exservicemen and Senior Citizen 12.40% 12.00% 12.68% 12.28% 12.96% 13.00% 13.43% Nature of Indebtedness Secured and Non-Convertible Unsecured, Subordinate and Non- Convertible Put and Call Option Not Applicable Deemed Date of Allotment The date on which the Board or a duly authorized committee approves the Allotment of NCDs. All benefits relating to the NCDs including interest on the NCDs shall be available to the investors from the Deemed Date of Allotment. The actual Allotment of NCDs may take place on a date other than the Deemed Date of Allotment. Valid applications by Existing Debenture Holders, Senior Citizens and Ex-servicemen falling under any of the below 3 categories shall be eligible for an additional coupon of 0.25 %. The Company would allot Option VI NCDs to all valid applications, wherein the applicants have not indicated their choice of the relevant options of the NCDs.
6 WHO CAN APPLY Category I Category II Category III Resident Public Financial Institutions as defined in Section 2(72) of the Companies Act 2013, Statutory Corporations including State Industrial Development Corporations, Scheduled Commercial Banks Co-operative Banks and Regional Rural Banks, which are authorized to invest in the NCDs Provident Funds of minimum corpus of Rs. 2,500 lacs, Pension Funds of minimum corpus of Rs lacs, Superannuation Funds and Gratuity Fund, which are authorized to invest in the NCDs Venture Capital funds and / or Alternative Investment Funds registered with SEBI Insurance Companies registered with the IRDA National Investment Fund (set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of the Government of India and published in the Gazette of India) Insurance funds set up and managed by the Indian army, navy or the air force of the Union of India or by the Department of Posts, India Mutual Funds, registered with SEBI Companies falling within the meaning of Section 2(20) of the Companies Act 2013; bodies corporate and societies registered under the applicable laws in India and authorized to invest in the NCDs Educational institutions and associations of persons and/or bodies established pursuant to or registered under any central or state statutory enactment; which are authorized to invest in the NCDs Trust including Public/private charitable/religious trusts which are authorized to invest in the NCDs Association of Persons Scientific and/or industrial research organisations, which are authorized to invest in the NCDs Partnership firms in the name of the partners Limited liability partnerships formed and registered under the provisions of the Limited Liability Partnership Act, 2008 (No. 6 of 2009) Resident Indian individuals and Hindu undivided families through the Karta aggregating to a value exceeding Rs. 5 lacs Resident Indian individuals Hindu undivided families through the Karta (Applications aggregating to a value not more than Rs. 5 Lacs)
7 DISCLAIMER Muthoottu Mini Financiers Limited ( MMFL/Company ) is subject to market conditions and other considerations, proposing a pub lic issue of Secured Redeemable Non Convertible Debentures and Unsecured Redeemable Non Convertible Debentures and has filed the Prospectus with the Registrar of Companies Kerala and Lakshadweep, BSE Limited and SEBI (for record purposes). The Prospectus is available on the website of the company at on the website of the stock exchange at and the website of the Lead Manager at Investors proposing to participate in the Issue should invest only on the basis of information contained in the Prospectus. Please see section entitled Risk Factors beginning on page no 12 to 30 of the Prospectus for risk in this regard. Disclaimer Clause of BSE BSE Limited ( The Exchange ) has given vide its letter dated 22 nd September, 2014, permission to this Company to use the Exchange s name in the offer document as one of the stock exchanges on which the Company s securities are proposed to be listed. The Exchange has scrutinized the offer document for its limited internal purpose of deciding on the matter of granting the aforesaid permission to the Company. The Exchange does not in any manner: a) warrant, certify or endorse the correctness or completeness of any of the contents of the offer document; or b) warrant that the Company s securities will be listed or will continue to be listed on the Exchange; or c) take any responsibility for the financial or other soundness of the Company, its promoters, its management or any scheme or project of the Company; and it should not for any reason be deemed or construed that the offer document has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of the Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein of for any other reason whatsoever. Disclaimer Clause of RBI The Company is having a valid certificate of registration dated April 13, 2002 bearing registration no. N issued by the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, There is also a revised RBI Certificate dated January 1, 2014 on account of conversion of the Company from Private Limited to Public Limited. However, RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/ discharge of liability by the company. Disclaimer Clause of SEBI "IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF OFFER DOCUMENT TO THE SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE OFFER DOCUMENT. THE LEAD MERCHANT BANKER, VIVRO FINANCIAL SERVICES PRIVATE LIMITED, HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE OFFER DOCUMENT ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE SEBI (ISSUE AND LISTING OF DEBT SECURITIES) REGULATIONS, 2008 IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE OFFER DOCUMENT, THE LEAD MERCHANT BANKER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ISSUER DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MERCHANT BANKER, VIVRO FINANCIAL SERVICES PRIVATE LIMITED, HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED SEPTEMBER 23, 2014 WHICH READS AS FOLLOWS: 1. WE CONFIRM THAT NEITHER THE ISSUER NOR ITS PROMOTERS OR DIRECTORS HAVE BEEN PROHIBITED FROM ACCESSING THE CAPITAL MARKET UNDER ANY ORDER OR DIRECTION PASSED BY THE BOARD. WE ALSO CONFIRM THAT NONE OF THE INTERMEDIARIES NAMED IN THE OFFER DOCUMENT HAVE BEEN DEBARRED FROM FUNCTIONING BY ANY REGULATORY AUTHORITY. 2. WE CONFIRM THAT ALL THE MATERIAL DISCLOSURES IN RESPECT OF THE ISSUER HAVE BEEN MADE IN THE OFFER DOCUMENT AND CERTIFY THAT ANY MATERIAL DEVELOPMENT IN THE ISSUE OR RELATING TO THE ISSUE UP TO THE COMMENCEMENT OF LISTING AND TRADING OF THE SHARES OFFERED THROUGH THIS ISSUE SHALL BE INFORMED THROUGH PUBLIC NOTICES/ ADVERTISEMENTS IN ALL THOSE NEWSPAPERS IN WHICH PRE- ISSUE ADVERTISEMENT AND ADVERTISEMENT FOR OPENING OR CLOSURE OF THE ISSUE HAVE BEEN GIVEN. 3. WE CONFIRM THAT THE OFFER DOCUMENT CONTAINS ALL DISCLOSURES AS SPECIFIED IN THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF DEBT SECURITIES) REGULATIONS, WE ALSO CONFIRM THAT ALL RELEVANT PROVISIONS OF THE COMPANIES ACT, 1956, SECURITIES CONTRACTS, (REGULATION) ACT, 1956, SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 AND THE RULES, REGULATIONS, GUIDELINES, CIRCULARS ISSUED THEREUNDER ARE COMPLIED WITH. WE CONFIRM THAT ALL COMMENTS/ COMPLAINTS RECEIVED ON THE DRAFT OFFER DOCUMENT FILED ON THE WEBSITE OF STOCK EXCHANGES HAVE BEEN SUITABLY ADDRESSED.