Muthoot Microfin Limited, one of India’s leading microfinance institutions, has successfully mobilized ₹50 crore through the private placement of non-convertible debentures (NCDs). The issue reflects the company’s continued ability to attract institutional investors while diversifying its funding mix to support growth in the microfinance sector.
Key Terms of the Issue
- Issue Size: ₹50 crore, with a green shoe option of ₹20 crore
- Number of Debentures: 5,000
- Face Value: ₹1,00,000 per debenture
- Interest Rate: 9.80% per annum
- Payment: Monthly coupon payments
- Tenure: 36 months
- Maturity Date: September 23, 2028
- Security: First-ranking charge of 1.10x over receivables
- Listing: BSE Limited
The issue was cleared by the Debenture Issue and Allotment Committee and falls within limits earlier approved by the company’s Board of Directors.
Strategic Importance
The successful fundraising demonstrates Muthoot Microfin’s strong credit profile and investor confidence in its business model. By offering an attractive 9.80% annual return with monthly payouts and robust security cover, the issue is expected to appeal to income-focused institutional investors.
The proceeds are likely to enhance the company’s lending capabilities, enabling it to expand financial access for underbanked communities—an area where microfinance continues to play a pivotal role in driving financial inclusion.
Market Outlook
The listing of the debentures on the BSE will provide secondary market liquidity, further enhancing investor confidence. The move underscores Muthoot Microfin’s emphasis on transparency, regulatory compliance, and prudent capital management.
Given the rising demand for debt instruments in India’s financial services sector, this issue highlights how established microfinance institutions are leveraging diversified funding channels to strengthen balance sheets and scale operations.
Summary
Muthoot Microfin’s ₹50 crore NCD issuance, with an option to raise an additional ₹20 crore, highlights its growing investor appeal and strategic focus on diversifying funding sources. Offering a 9.80% return with strong security cover and BSE listing, the issue is set to support the company’s lending expansion in the microfinance space while reinforcing its role in advancing financial inclusion across India.
Disclaimer:
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