Mumbai: "Our average interest rates on gold financing have increased to 21.6 percent from 19.7 percent six months ago, an increase of 1.9 percent," Muthoot Finance Managing Director George Alexander Muthoot told news men. The company offers different type of loan products with interest rates ranging from as low as 12 percent to as high as 24-25 percent. "Yield on the loans we give has been at around 19 percent in last three years. But in last six months, banks have increased their lending rates so our cost of borrowings has also gone up, so we have increased our rates from 19.7 percent to 21.6 percent," he said. "But this 21.6 percent average is still the lowest offered by a NBFC in gold financing," he claimed. "The company as on today has assets under management to the tune of 19,000 crore including 2,090 crore worth assets added in the first quarter ended June of this fiscal. We expect a similar trend on asset side additions to continue in coming quarters," Muthoot said. "On the liability side the company has bank loan of 7,200 crore, in addition to 2,399 crore by way of bilateral agreements from them, retail NCDs of 4,400 crore through private placement, and unsecured commercial paper of 1,171 crore," he said. "Muthoot's gold holdings have risen steadily from 15 MT in 2005 to 210 MT as of today in the strong rooms of our 3,100 branches across India," he said. According to the company, the gold loan industry has high growth potential and offers huge untapped opportunity. India annually imports around 600-700 MT of gold annually of which around 95 percent is sold as jewellery. "We estimate that there is 18,000 tonne of gold in the country and the total organised business is of around 800 to 900 tonne only, which shows how much potential is there," Muthoot said. "The per branch gold loaning business of the company has touched to 5.9 crore today, from 1.7 crore in March," he said. The company plans to raise 1,000 crore through its maiden public issue of listed redeemable non-convertible debentures (NCDs), of face value of 1,000 each aggregating to 500 crore. "The company by way of green shoe has option to retain over subscription of another 500 crore," Muthoot said. "The object of our maiden listed redeemable NCD public issue is to diversify the bouquet of company liability," he said. The NCD issue with three investment options and effective yield of up to 12.25 percent per annum opens on August 23 and closes on September 5, 2011. The NCD proceeds shall be used by company for various financing activities, including lending and investments, to repay existing liabilities or loans and towards business operations including for capital expenditure and working capital requirements. The company in May this year had raised close to 900 crore through an Initial Public Offering (IPO). The promoters holding in the company had come down to 80 percent post the IPO. "Seven per cent of equity was placed with a private equity pre-IPO, while 13 percent stakeholding was diluted through the IPO," Muthoot said. The company offers personal and business loans secured by gold jewellery, or gold loans, primarily to individuals who possess gold jewellery but could not access formal credit within a reasonable time, to meet short-term liquidity requirements.