Muthoot Microfin allots ₹250 crore secured NCDs at 9.25% coupon
- Muthoot Microfin allotted ₹250 crore in secured NCDs via private placement
- Instruments carry a 9.25% annual coupon and mature in September 2028
- Debt is backed by a first-ranking charge on the company's receivables
- Issuance aims to diversify funding sources and lower borrowing costs
*this image is generated using AI for illustrative purposes only.
Muthoot Microfin has allotted ₹250 crore worth of secured, listed non-convertible debentures (NCDs) through a private placement. The instruments carry an annual coupon rate of 9.25% and mature in September 2028.
Allotment details
The Debenture Issue and Allotment Committee approved the allotment on September 8, 2026, following Board approval dated June 30, 2026. The issuance consists of 250,000 debentures with a face value of ₹10,000 each.
The following table summarises the key terms of the issuance:
| Parameter | Details |
|---|---|
| Total value | ₹250 crore |
| Number of NCDs | 250,000 |
| Face value per NCD | ₹10,000 |
| Placement type | Private placement |
| Annual coupon rate | 9.25% |
| Interest payment schedule | Monthly |
| Tenure | 24 months |
| Date of allotment | September 8, 2026 |
| Maturity date | September 8, 2028 |
| Security | First ranking charge over receivables |
| Listing | BSE Limited |
The NCDs are secured by a first-ranking and exclusive charge of 1.0x over the company’s present and future receivables, which are free from encumbrances. Interest is payable monthly. The securities have been listed on the BSE Limited.
This private placement route allows financial institutions to raise debt capital from select institutional and qualified investors outside the public issuance process. The allotment was made within the limits approved by the Board of Directors.
Strategic context
This fund raise forms part of Muthoot Microfin's strategy to strengthen its funding profile, diversify its liability mix, and optimise its overall cost of borrowing. Mr Sadaf Sayeed, CEO of Muthoot Microfin Limited, noted that the company's cost of funds declined by 75 bps in FY26. He added that a recent upgrade in the company's credit rating to CRISIL AA-/Stable strengthens its ability to access funding at competitive rates.
As on June 30, 2026, the company served 3.25 million active customers through 1,671 branches across 21 states, with a Gross Loan Portfolio (GLP) of ₹14,457.2 crore.
Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE046W01019/429a7eff-018b-4e7e-a3f1-4ff1bbe19bc9.pdf
Historical Stock Returns for Muthoot Microfin
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +3.70% | -2.32% | -12.32% | +1.87% | +2.51% | -35.27% |
How will the monthly interest payment structure of these NCDs impact Muthoot Microfin's short-term cash flow management compared to quarterly or semi-annual payouts?
Given the 9.25% coupon rate, how does this issuance compare to the company's current weighted average cost of debt, and will it dilute the 75 bps cost reduction achieved in FY26?
What specific expansion initiatives or portfolio growth targets is Muthoot Microfin prioritizing with this ₹250 crore capital raise?
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