Muthoot Microfin , a Kerala-based NBFC-MFI, is gearing up to diversify its funding sources with a planned Rs 375 crore non-convertible debenture (NCD) issue. The microfinance company aims to tap high net worth individuals (HNIs) through this private placement, offering a coupon rate of 9.5%.

Key Highlights of the Proposed Bond Issue

This strategic move comes on the heels of Muthoot Microfin's recent $15 million fundraise from Swiss impact investor Blue Orchard, underlining the company's proactive approach to resource mobilization.

Diversification Strategy and Future Plans

The bond issue is part of Muthoot Microfin's broader strategy to diversify its funding sources as stability returns to the microfinance sector. The company's financial roadmap includes:

• Potential $35 million external commercial borrowing (ECB) later in the fiscal year
• Maintaining an annual fundraising plan of Rs 1,500 crore
• Managing assets under management (AUM) of Rs 12,253 crore

Financial Standing and Credit Rating

CareEdge Global has assigned a 'BB-/stable' rating to Muthoot Microfin's ECB, indicating:

• Moderate risk of default
• Comfortable capitalization
• Diversified resource profile

This rating provides potential investors with insight into the company's financial health and risk profile.

As the microfinance sector in India continues to evolve, Muthoot Microfin's fundraising initiatives demonstrate its commitment to maintaining a robust financial position and exploring diverse funding avenues. The success of this bond issue could set a precedent for similar moves by other players in the microfinance industry, potentially opening up new channels for capital raising in the sector.

Muthoot Microfin Limited (MML), a leading microfinance institution in India, has announced plans to explore fundraising through the issuance of Non-Convertible Debentures (NCDs) on a private placement basis. The company's Debenture Issue and Allotment Committee is scheduled to meet on Wednesday, October 29, 2025, to consider and approve this potential fundraising initiative.

Key Details of the Announcement

• Meeting Date: October 29, 2025
• Purpose: To consider and approve fund raising by issuance of NCDs on private placement basis
• Committee: Debenture Issue and Allotment Committee of Muthoot Microfin Limited

This move comes as part of MML's ongoing efforts to diversify its funding sources and strengthen its financial position in the competitive microfinance sector.

Company Overview and Recent Performance

Muthoot Microfin, a part of the Muthoot Pappachan Group (MPG), has established itself as a significant player in the Indian microfinance landscape. As of June 30, 2025, the company reported:

The company's recent financial performance shows signs of recovery after facing challenges in the previous fiscal year:

Strategic Importance of NCD Issuance

The decision to explore NCD issuance comes at a time when MML is looking to strengthen its financial position and support its growth strategies. NCDs can offer several advantages:

1. Diversified Funding: Helps in reducing dependence on traditional banking channels
2. Cost-Effective: Potentially lower interest rates compared to other forms of debt
3. Flexible Terms: Allows for customized repayment schedules and interest structures

Industry Context

The microfinance sector in India has faced challenges in recent times, including:

• Deterioration in asset quality due to macroeconomic factors
• Socio-political interventions affecting repayment behavior
• Regulatory changes impacting lending practices

Despite these challenges, MML's exploration of NCD issuance indicates a proactive approach to fundraising and liquidity management.

Outlook

As MML considers this fundraising initiative, investors and industry observers will be keenly watching for:

1. The size of the potential NCD issuance
2. Interest rates and terms offered
3. Utilization of funds raised
4. Impact on the company's overall debt profile and financial health

The outcome of the October 29 meeting may provide more clarity on MML's financial strategy and its plans for navigating the current market conditions in the microfinance sector.

Note: Investors are advised to conduct their own research and consult financial advisors before making any investment decisions based on this information.

About Muthoot Microfin Limited

Muthoot Microfin Limited is an NBFC-MFI (Non-Banking Financial Company-Microfinance Institution) and a part of the Muthoot Pappachan Group. The company focuses on providing small-ticket collateral-free loans to women borrowers, operating across 20 states in India through its extensive branch network.