Muthoot Microfin Limited , a prominent player in the microfinance sector, has successfully raised ₹50 crore through the private placement of non-convertible debentures (NCDs). The company allotted 5,000 NCDs, each with a face value of ₹1,00,000.

Key Details of the NCD Issue

Approval and Compliance

The allotment of these debentures was approved by Muthoot Microfin's Debenture Issue and Allotment Committee. This issuance falls within the limits previously sanctioned by the company's Board of Directors.

Significance of the Issue

This successful private placement demonstrates Muthoot Microfin's ability to attract institutional investors and diversify its funding sources. The raised capital is likely to bolster the company's lending capabilities in the microfinance sector, potentially supporting its growth and expansion plans.

The attractive interest rate of 9.80% per annum, coupled with monthly payment schedules, offers a steady income stream for investors. The security provided by the first ranking charge over the company's receivables adds an extra layer of assurance for the debenture holders.

Market Implications

The listing of these NCDs on the BSE Limited is expected to provide liquidity to the investors. It also reflects Muthoot Microfin's commitment to transparency and adherence to market regulations.

This fundraising initiative by Muthoot Microfin underscores the ongoing demand for debt instruments in the financial services sector, particularly from established microfinance institutions. It also highlights the company's strategic approach to capital management and its efforts to optimize its funding mix.

As the microfinance sector continues to play a crucial role in financial inclusion, such capital-raising activities are likely to support the industry's growth and its ability to serve underbanked populations across India.

Muthoot Microfin Limited , a prominent player in the microfinance sector, has taken a significant step to bolster its financial position. The company's Debenture Issue and Allotment Committee has approved the issuance of non-convertible debentures (NCDs) on a private placement basis, aiming to raise up to ₹75.00 crore with an additional green shoe option of ₹45.00 crore.

Debenture Details

The approved issuance comprises up to 7,500 listed, rated, senior, secured, transferable, and redeemable non-convertible debentures. Each debenture carries a face value of ₹1,00,000, bringing the total potential raise to ₹75.00 crore. Key features of the debentures include:

• Tenure: 36 months
• Coupon Rate: 9.80% per annum
• Payment Schedule: Monthly
• Listing: To be listed on BSE Limited

Security and Structure

The principal amount of the debentures will be secured by a first ranking exclusive charge of 1.10 times over the company's receivables. This structure provides an additional layer of security for investors, potentially making the offering more attractive in the debt market.

Regulatory Compliance

The decision to issue these debentures was made during a meeting of the Debenture Issue and Allotment Committee. The company has duly informed the stock exchanges about this development, in compliance with Regulation 50(1) & 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Market Implications

This move by Muthoot Microfin Limited indicates the company's strategy to leverage debt financing for its operations. The issuance of NCDs can provide the company with necessary capital while offering investors a fixed-income investment opportunity. The coupon rate of 9.80% may appeal to investors seeking steady returns in the current market environment.

Conclusion

As Muthoot Microfin Limited proceeds with this debenture issuance, market participants will be keen to observe the uptake and subsequent utilization of funds. This development underscores the company's proactive approach to capital management and its commitment to exploring diverse funding avenues to support its business objectives in the microfinance sector.