Lakshmi Iyer, CFA

Credit

<p>Both <a href="https://www.smartkarma.com/entities/muthoot-finance-ltd" target="_blank" data-smartkarma-citation="entities:15425:1" rel="noopener">Muthoot Finance (MUTH IN)</a> and <a href="https://www.smartkarma.com/entities/manappuram-finance-ltd" target="_blank" data-smartkarma-citation="entities:12559:1" rel="noopener">Manappuram Finance (MGFL IN)</a> are gold loan companies with very similar businesses. The major difference is the larger size of Muthoot and the somewhat larger share of non-gold loans in Manappuram's portfolio. Given this, we feel the spread differential of over 200 bps between bonds of the 2 companies due ’23 is excessive at present. As such, Manappuram represents better value.</p><div class="content-highlight"><p><em>Fundamental credit research focused on Asian high yield, including coverage of areas which are generally overlooked such as Indian finance companies and non-USD denominated credit (SGD).  Sector agnostic. Research process consists of rigorous bottom-up company analysis combined with spotting market dislocations to provide trade ideas.</em></p></div>

Both Muthoot Finance (MUTH IN) and Manappuram Finance (MGFL IN) are gold loan companies with very similar businesses. The major difference is the larger size of Muthoot and the somewhat larger share of non-gold loans in Manappuram's portfolio. Given this, we feel the spread differential of over 200 bps between bonds of the 2 companies due ’23 is excessive at present. As such, Manappuram represents better value.Fundamental credit research focused on Asian high yield, including coverage of areas which are generally overlooked such as Indian finance companies and non-USD denominated credit (SGD).  Sector agnostic. Research process consists of rigorous bottom-up company analysis combined with spotting market dislocations to provide trade ideas.

Relative Value - Manappuram '23 Vs. Muthoot '23