Muthoot Fincorp Plans ₹600 Crore Fundraise Via NCDs

Muthoot Fincorp Ltd., a non-banking financial company from the Muthoot Pappachan Group, has opened a fresh tranche of secured non-convertible debentures (NCDs) to raise funds from investors.

The company’s second tranche issue will open for subscription on 13 March 2026, and is scheduled to close on 23 March 2026.

Through the public offering, the lender aims to mobilise up to ₹600 crore, including an option to retain additional subscriptions. The NCDs are proposed to be listed on the Bombay Stock Exchange (BSE) debt segment, allowing investors to trade them after listing.

According to the company, funds raised through the issue will mainly support lending activities, repayment of existing borrowings and other corporate needs.

What Are The Key Details Of The Issue?

The issue is being offered under the company’s shelf prospectus programme.

Each debenture carries a face value of ₹1,000 and is being issued at the same price. Investors will be able to select from different maturity options based on their investment preference.

The company has appointed Nuvama Wealth Management Ltd as the lead manager, while Integrated Registry Management Services Pvt Ltd will act as the registrar to the issue.

Investors applying through intermediaries with applications up to ₹5 lakh need to use the unified payments interface (UPI) mechanism for blocking funds along with a valid UPI ID. Applications can also be submitted through self-certified syndicate banks (SCSBs) and through the stock exchange platform.

What Returns And Ratings Are Offered To Investors?

The NCDs come with multiple tenure choices and corresponding interest payouts. Depending on the selected series and maturity period, the effective annual yield ranges between 8.70% and 9.10%. Tenure options available in the issue include 24 months, 36 months, 60 months and 72 months.

Credit rating agencies have assigned investment-grade ratings to the issue. CRISIL Ratings has rated the NCDs AA- with a positive outlook, while Brickwork Ratings has assigned an AA rating with a stable outlook.

Credit ratings at this level are generally meant to show that the issuer is viewed as capable of servicing its debt commitments in a timely manner.

What Does Muthoot Fincorp’s Business Look Like?

Muthoot Fincorp, incorporated in 1997, operates as a non-deposit-taking non-banking financial company (NBFC). The company is best known for lending against gold jewellery.

In this business model, customers pledge gold ornaments as collateral in exchange for short-term funds. Both individuals and small businesses use such loans when they need quick liquidity.

Gold-backed lending remains the company’s main line of business. Alongside this, Muthoot Fincorp also provides foreign exchange and money transfer services, acting as a sub-agent for registered remittance operators.

By December 31, 2025, there were 3,757 branches of the corporation in 25 states, including Delhi and the Andaman and Nicobar Islands.

The company's finance needs, including lending activities and other financial obligations, are meant to be supported by the NCD issuance.

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Investor Takeaway

The NCD issue gives investors another fixed-income option with yields between 8.70% and 9.10%. As the issuer operates in the NBFC space and is largely focused on gold-backed lending, the credit profile and business model remain important factors to consider.

Listing on the BSE can provide liquidity, though price movement after listing can depend on interest rate trends and demand in the debt market.

Sources:

CNBC

Chittorgarh