Muthoot Finance , India's leading gold loan non-banking financial company (NBFC), has successfully raised $600 million through an External Commercial Borrowing (ECB) issuance. This significant financial move is set to bolster the company's lending capabilities across India.

Bond Details and Ratings

The bonds, priced at 6.38% with a 4.5-year tenor, have received favorable ratings from international agencies. S&P Global has assigned a BB+ rating, while Moody's has rated the bonds at Ba1. These ratings reflect the company's strong financial position and growth prospects.

Investor Participation

The issuance attracted a geographically diverse investor base:

Notably, fund and asset managers dominated the subscription, accounting for 91.00% of the total.

Strategic Significance

This bond issuance marks a significant milestone for Muthoot Finance:

1. It represents the fifth drawdown under the company's $2 billion Global Medium-Term Note Programme.
2. With this issuance, Muthoot Finance has successfully completed its full targeted amount under the programme.
3. The successful raise follows recent rating upgrades by S&P Global and Moody's, underscoring the company's improving financial profile.

Utilization of Funds

Muthoot Finance plans to use the proceeds from this ECB issuance to extend additional credit to customers across India, potentially expanding its gold loan portfolio and other lending activities.

Financial Advisors

Deutsche Bank and Standard Chartered played crucial roles in this transaction, serving as Joint Global Coordinators and Bookrunners.

This successful international bond issuance demonstrates Muthoot Finance's strong standing in the global financial markets and its ability to access diverse funding sources to support its growth strategies in the Indian lending sector.

Muthoot Finance , a leading non-banking financial company (NBFC), has announced a significant move to strengthen its presence in the housing finance sector. The company has completed a substantial equity infusion of ₹2,000 crore into its wholly-owned subsidiary, Muthoot Homefin (India) Limited.

Capital Injection Details

The capital injection, aimed at fortifying Muthoot Homefin's financial position, was executed through the allotment of 2,66,66,666 equity shares to Muthoot Finance Limited. This strategic move is expected to have a positive impact on the subsidiary's capital base and improve its capital adequacy ratio.

Purpose and Impact

According to the company's disclosure, the additional equity infusion serves multiple purposes:

1. Strengthening the capital base of Muthoot Homefin
2. Improving the capital adequacy ratio
3. Funding business growth
4. Supporting general corporate purposes
5. Facilitating repayment of existing loans

Muthoot Homefin Overview

Muthoot Homefin (India) Limited, headquartered in Kerala, operates in the housing finance sector. The company has shown significant growth in recent years, as evidenced by its turnover figures:

This data demonstrates a consistent upward trend in the subsidiary's financial performance over the past three years.

Regulatory Compliance

The equity infusion was completed in compliance with the Securities and Exchange Board of India (SEBI) regulations. Muthoot Finance has made the necessary disclosures under Regulation 30, read with Schedule III and other applicable regulations of the SEBI Listing Obligations and Disclosure Requirements.

Conclusion

This strategic move by Muthoot Finance underscores the company's commitment to expanding its footprint in the housing finance sector. By strengthening Muthoot Homefin's capital base, the parent company aims to support the subsidiary's growth trajectory and enhance its competitive position in the market.

As the housing finance industry continues to evolve, this capital infusion positions Muthoot Homefin to capitalize on emerging opportunities and navigate potential challenges in the sector.