Muthoot Mercantile Limited IPO

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The rating of an issuer company reflects its past growth and performance. The rating increases when the company consistently performs well and decreases when it is not performing well.

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Low risk:

AAA, AA+, AA, AA-, A+, A, A-

Moderate risk

BBB+, BBB, BBB-, BB+, BB

High risk

BB-, B+, B, B-, C, D

The rating agency for this Bond is Crisil.

About

Muthoot Mercantile Limited is a non-deposit-taking non-banking financial company — middle layer (NBFC-ML) registered with the Reserve Bank of India (RBI) under Section 45-IA of the RBI Act, 1934. The company is primarily engaged in providing gold loans against the pledge of household and/or used gold jewellery to retail customers who require immediate access to funds. In addition to gold loans, the company also provides unsecured pronote loans to individual customers. The company traces its operational history to 1939, when the late M. Ninan Muthoot commenced a gold loan business in Thiruvananthapuram, Kerala. It was incorporated as a public limited company in 1997 and subsequently registered as an NBFC with the Reserve Bank of India in 2002. As of March 31, 2026, the company operated through a network of 325 branches across 11 states and 1 Union Territory in India. Its branch network functions as the primary interface for loan origination, disbursement, collections, and customer servicing activities. The company primarily caters to individuals from rural, semi-urban, and urban regions who seek short-term funding for personal, agricultural, emergency, business, and consumption-related purposes. Use of Proceeds The proceeds from the current issue of NCDs are proposed to be used for the following purposes: Onward lending, financing, and for repayment/ prepayment of principal and interest of borrowings of the company — at least 75% of the net proceeds (as per the prospectus). General corporate purposes—up to a maximum 25% of the net proceeds.;

Pros and Cons

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The company claims to have an operating history of over 84 years in the gold loan business, tracing its origins to 1939 under the Muthoot family legacy. It states that its longstanding presence and customer familiarity have contributed to building a recognised brand in the gold loan market. As of December 31, 2025, the company’s gold loan portfolio comprised approximately 1.79 lakh customers with outstanding principal of Rs 1,175.46 crore, accounting for 99.80% of its total loan portfolio.

The company states that it offers multiple gold loan schemes with flexible terms for loan amount, interest rates, and tenure to cater to varying customer requirements. It claims that limited documentation requirements and collateral-backed lending enable faster loan processing and disbursement. The company also allows prepayment without penalties and offers loan tenures of up to 12 months, tailored to customer needs.

The company declares that it has steadily expanded its branch network across India to strengthen its customer reach. Its branch network increased from 242 branches across 9 states and 1 Union Territory as of March 31, 2024, to 326 branches across 11 states and 1 Union Territory as of March 31, 2026. Out of these, 234 branches were located outside Kerala as of March 31, 2026, supporting expansion into rural and semi-urban markets.

The company states that it has implemented internal control and risk management systems supported by an in-house technology platform. It claims that the platform assists in loan processing, audit monitoring, customer data management, and pledged gold tracking. The company further states that committees such as the Audit Committee, Asset Liability Management Committee and Risk Management Committee oversee operational and risk governance processes across its branch network.

The company has experienced a consistent increase in revenue from operations and profit after tax (PAT). Revenue from operations increased from Rs 94.3 crore in FY23 to Rs 131.2 crore in FY24 and Rs 164.1 crore in FY25. PAT increased from Rs 17.7 crore in FY23 to Rs 24.3 crore in FY24 and Rs 28.1 crore in FY25.

Muthoot Mercantile Limited

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