Muthoot Finance Ltd., India’s largest pureplay gold loan non-banking finance company (NBFC), has completed a fresh equity infusion of ₹200 crore into its wholly owned housing finance subsidiary Muthoot Homefin (India) Ltd.
Capital Infusion Details
According to the company’s exchange filing, Muthoot Homefin has allotted 2.67 crore equity shares to Muthoot Finance in cash at a premium of ₹9 per share. The capital infusion is aimed at strengthening the subsidiary’s capital base and capital adequacy ratio, providing a stronger foundation for growth.
The funds raised will be deployed towards business expansion, general corporate purposes, and repayment of existing loans. Since Muthoot Homefin is a wholly owned subsidiary, the allotment does not alter the shareholding pattern.
Boosting Housing Finance Business
Muthoot Homefin, headquartered in Kerala, operates in the affordable housing finance segment, catering to middle and lower-income households. The company has been steadily scaling its presence, with revenues rising from ₹138.84 crore in FY23 to ₹326.33 crore in FY25, reflecting growing demand for affordable home loans in semi-urban and rural markets.
The equity infusion will provide the subsidiary with additional firepower to expand loan disbursements at a time when demand for housing finance is being fueled by urbanisation, government housing schemes, and a pickup in real estate activity.
Parent Company’s Record Quarter
The capital infusion announcement comes on the back of stellar first-quarter earnings for Muthoot Finance.
- Net profit: ₹2,046 crore in Q1FY26, up 89.6% YoY from ₹1,079 crore (highest-ever quarterly profit)
- Net Interest Income (NII): ₹3,473 crore, up 50.6% YoY from ₹2,305 crore
- Both profit and NII comfortably beat CNBC-TV18’s estimates of ₹1,674 crore and ₹3,199 crore, respectively.
The strong performance was attributed to rising loan demand, improved yields, and better cost management across its gold loan portfolio.
Strategic Importance
Industry analysts say the ₹200 crore equity infusion underscores Muthoot Finance’s strategy to diversify its lending portfolio beyond gold loans and tap into the high-potential housing finance space.
With India’s affordable housing sector continuing to receive policy and regulatory support, Muthoot Homefin is expected to play a critical role in the group’s long-term growth strategy.
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