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.

Muthoot Microfin Limited (MML), a leading microfinance institution in India, has received a 'CareEdge BB-/Stable' rating from CareEdge Global for its USD 50 million external commercial borrowing (ECB) program. This rating applies to both the existing USD 15 million ECB and the proposed USD 35 million ECB.

Key Highlights

• Rating Assignment: CareEdge BB-/Stable
• ECB Program: USD 50 million (USD 15 million existing + USD 35 million proposed)
• Assets Under Management (AUM): Rs 12,253.00 crore as of June 30, 2023

Factors Influencing the Rating

Strengths

1. Established Market Position: MML has grown its AUM at a CAGR of ~25% over four years through FY23.
2. Comfortable Capitalization: The company maintains a capital adequacy ratio of 27.90%, well above the regulatory requirement of 15%.
3. Diversified Resource Profile: MML has a mix of funding sources, including banks, NBFIs, and foreign currency borrowings.
4. Expected Parent Support: CareEdge Global factors in potential support from Muthoot Fincorp Limited (MFL), which holds a 50.20% stake in MML.

Challenges

1. Asset Quality Concerns: Gross Non-Performing Assets (GNPAs) rose to 4.80% in March 2023, leading to losses in fiscal 2023.
2. Vulnerability to Economic Shocks: The microfinance segment is susceptible to economic downturns and socio-political events.

Financial Performance

Recent Developments

• MML reported a net profit of Rs 6.00 crore in Q1 FY24, showing signs of recovery after implementing regulatory changes and prudent underwriting norms.
• The company operates through 1,726 branches across 20 states, with a focus on providing small-ticket collateral-free loans to women borrowers.

Outlook

CareEdge Global has assigned a 'Stable' outlook, reflecting expectations that MML's credit profile will continue to be supported by its market position and anticipated parent company support. However, the company's ability to improve collection efficiency and return to profitability remains a key factor to watch.

About Muthoot Microfin Limited

Muthoot Microfin Limited is an NBFC-MFI and part of the Muthoot Pappachan Group. The company focuses on providing small-ticket collateral-free loans to women borrowers, with products including income generation loans, consumer durable loans, water and sanitation loans, individual loans, and MSME business loans.

As the microfinance industry navigates through challenges, MML's strategic initiatives and the support from its parent company will be crucial in maintaining its market position and improving its financial performance in the coming years.