Muthoot Fincorp NCD - June 26, - Tranche IV review - (Not Rated)

•    This is the 29h debt issue from this company since July 2014.
•    The last debt issue was in April 2026.
•    The company has come with this debt offer just within two and half of its previous offer.
•    For this debt offer rates are hiked a bit, but tenors are maintained.
•    Ratings are maintained as CRISIL AA/Stable, and BWR AA/Stable.
•    Well-informed investors looking for steady interest income may consider parking of funds.

ABOUT COMPANY:
Muthoot Fincorp Ltd. (MFL) is middle layer NBFC (“NBFC ML”) registered with the RBI. The Company is one of the prominent gold loan players in the Indian market. 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 the Company as of March 31, 2026, March 31, 2025 and March 31, 2024 comprised approximately 37.78 lakhs, 34.00 Lakhs and 30.46 lakhs loan accounts. As of March 31, 2026, it operated out of 3781 branches located across 25 states, including union territory of Andaman and Nicobar Islands and the national capital territory of Delhi and employed 29,505 employees including 65 contracted experts in its operations.

The company has been engaged in the gold loans business for over two decades and are headquartered in Kerala, India. It provides retail loan products, primarily comprising of gold loans. Its Gold Loan variants include Muthoot Blue Super Value Loan, Easy Blue, Easy Max, Easy Pro, Restart India Pradhan, Easy Scale Up, Vyapar Vikas, Kisan Vikas, Udaan etc which are designed to suit needs and preferences of various customer segments. The 24x7 Express Gold loan facility of the Company helps customers to avail quick top-up loans (subject to eligibility) against their gold jewellery already pledged with it.

In addition to the gold loan business, it also provides secured loans to the MSME segment and salaried
customers, digital and other unsecured loans to the MSME segment, small businesses, traders, and similar customer segments. The company also distributes mutual funds, general and life insurance products, provides foreign exchanges through its branches and also provides money transfer services as sub-agents of various registered money transfer agencies.

Building on the core gold loan franchise, the Company has progressively diversified into a broader, multi-business-unit financial services franchise, supported by Muthoot FinCorp ONE, its digital platform, that spans across retail and MSME lending, including loans against property, business loans, supply chain finance, UPI based cashflow-led digital lending and supported by other adjacent offerings. The company is also engaged in generation and sale of wind energy through its wind farms located in Tamil Nadu and engaged in the business of real estate through joint venture developers of the company owned land parcels. Furthermore, it has also obtained the Certificate of Registration dated January 16, 2025 to act as Corporate Agent (Composite) for the period January 16, 2025 to January 15, 2028 from the Insurance Regulatory and Development Authority of India.

ISSUE DETAILS:
The company is coming out with its 29th Debt offers as NCD June 26 issue, Tranche IV. It will issue 6000000 secured, redeemable non-convertible debentures of face value of Rs. 1000 each. Under this debt offer it is issuing NCDs worth Rs. 200 cr. as the base size with a green shoe option of retaining additional subscription to the tune of Rs. 400 cr., thus making the overall issue size worth Rs. 600 cr. The company has a shelf limit of Rs. 3000 cr. The issue is opening for subscription on June 19, 2026, and will close on or before July 03, 2026. 

The minimum application is to be made for 10 NCDs (Rs. 10000) and in multiple of 1 NCD (Rs. 1000) thereon, thereafter. Post-allotment NCDs will be listed on BSE.

MFL will spend Rs. 9.02 cr. for the proceeds of the entire amount of Rs. 600 cr. Out of the available net proceeds, at least 75% will be used for onward lending, financing, repayment/prepayment of existing borrowings with interest, and the balance up to 25% for general corporate purposes. 

The issue is solely lead managed by Nuvama Wealth Management Ltd., while Integrated Registry Management Services Pvt. Ltd. is the registrar of the issue and Vardhman Trusteeship Pvt. Ltd. is the Debenture Trustee. 

It offers the coupon rates between 8.51% to 9.15% and has the tenors for 24 months, 36 months, 60 months, 72 months. Interest payment will be either Monthly, Annually, or Cumulative as per the series applied. 

The company has allocated 10% for Institutional investors, 20% for non-institutional investors, 50% for HNIs, and 20% for Retail investors. 

ISSUE RATING:
This offer is rated as CRISIL AA / Stable by CRISIL, and BWR AA/Stable. The rating given by Crisil Ratings Limited and Brickwork Ratings India Private Limited is valid as on the date of this Tranche I Prospectus and shall remain valid on date of issue and Allotment of the NCDs and the listing of the NCDs on BSE. The ratings of the NCDs indicates that instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. The ratings provided by Crisil Ratings Limited and Brickwork Ratings India Private Limited may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. These ratings are not a recommendation to buy, sell or hold securities and Investors should take their own decisions. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, MFL has (on a consolidated basis) posted total revenue/net profits of Rs. 4101.19 cr. / Rs. 397.28 cr. (FY21) and Rs. 4355.13 cr. / Rs. 412.55 cr. (FY22), and Rs. 5151.33 cr. / Rs. 646.42 cr. (FY23), and Rs. 6554.31 cr. / Rs. 1047.98 cr. (FY24), Rs. 8511.57 cr. / Rs. 607.99 cr. (FY25), Rs. 11227.80 cr. / Rs. 1847.62 cr. (FY26). It has posted consistent growth in its top and bottom lines for the reported periods.  Its current debt equity ratio as of the March 31, 2026, of 6.56 will stand enhanced to 6.63 post this issue.