Muthoot Microfin , a prominent player in the microfinance sector, has successfully raised ₹375 crore through the issuance of non-convertible debentures (NCDs) in two separate tranches. This strategic move is aimed at bolstering the company's capital base and supporting its ongoing operations.

Debenture Issuance Details

The company has issued two sets of debentures:

Key Features of the Debentures

Tranche 1 (₹125.00 crore):

• Tenure: 24 months
• Allotment Date: November 4, 2025
• Maturity Date: November 4, 2027
• Interest Rate: 9.80% per annum, payable monthly
• Security: First ranking, exclusive, and continuing charge on identified receivables with 1.1 times coverage of the outstanding debenture amount

Tranche 2 (₹250.00 crore):

• Series I:
  • Amount: ₹75.00 crore (with green-shoe option of ₹25.00 crore)
  • Tenure: 24 months
  • Interest Rate: 9.90% per annum, payable monthly
• Series II:
  • Amount: ₹75.00 crore (with green-shoe option of ₹75.00 crore)
  • Tenure: 36 months
  • Interest Rate: 10.00% per annum, payable monthly
• Security: Exclusive charge on specific asset portfolio of receivables with a security cover of 1.05 times

Implications for Muthoot Microfin

This successful debenture issuance demonstrates Muthoot Microfin's strong standing in the debt market and its ability to attract institutional investors. The raised capital is expected to enhance the company's lending capabilities and support its growth strategies in the competitive microfinance sector.

The varied tenure and interest rate options across the two tranches suggest a thoughtful approach to managing the company's debt profile, balancing short-term and medium-term funding needs.

As the microfinance industry continues to play a crucial role in financial inclusion, Muthoot Microfin's capital raise positions it well to expand its reach and impact in serving underbanked communities across India.

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.