Muthoot Fincorp NCD IPO

Rating

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.

Categories

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

Headquartered in Kerala, Muthoot Fincorp is a middle-layer non-banking financial company (NBFC ML) registered with the Reserve Bank of India (RBI). The company primarily offers gold loans, which are secured personal and business loans against gold jewellery and ornaments. These loans cater to individuals who may not have easy access to traditional credit, helping them address short-term liquidity needs. The company’s portfolio includes various gold loan products like Muthoot Blue Super Value Loan and Easy Max, among others. In addition to gold loans, Muthoot Fincorp provides foreign exchange services, money transfer services, and is involved in wind energy generation through its wind farms in Tamil Nadu. The company also participates in the real estate business through joint venture developments. Muthoot Fincorp operates 3,736 branches across 25 states and employs over 26,723 people, with its primary focus on the gold loan sector. Use of Proceeds The proceeds from the current issue of NCDs are proposed to be used for the following purposes: Onward lending and financing the existing indebtedness of the company (repayment/prepayment of interest and the principal of borrowings), General corporate purposes.;

Pros and Cons

Pros

Cons

Muthoot Fincorp claims to have been operating in the gold loan market for over 20 years and is one of the largest Indian NBFCs in this space. The company further claims that its deep experience and specialised focus on gold loans have enabled it to create a niche in the market, particularly in South India, where its brand is well-recognised.

With 3,736 branches across 25 states, Muthoot Fincorp claims to have an extensive network, particularly in rural and semi-urban locations. The company states that this large footprint allows it to provide easy access to its services, catering to a wide variety of customers, including small business owners, farmers, and salaried individuals.

Muthoot Fincorp claims to focus on providing customer-friendly services with a strong emphasis on convenience and accessibility. The company further states that its branches are strategically located to cater to customer needs, offering extended operating hours and fast loan disbursal. The company also claims that its staff is trained to provide professional and attentive service, ensuring that loan appraisals and disbursements are completed within minutes, enhancing customer satisfaction.

Muthoot Fincorp claims to have a diverse range of funding sources, including term loans from banks, non-convertible debenture issuances, commercial paper issuances, and cash credit facilities. The company further states that its strong relationships with nationalised and private banks, backed by a track record of timely debt servicing, enable it to secure competitive funding options.

The company claims to have been assigned the following credit ratings: Crisil AA-/Stable for its bank facilities, Crisil AA-/Stable and BWR AA-/(Stable) by Brickworks for its non-convertible debt instruments, Crisil A+/Stable for Rs 849 crore perpetual bonds, BWR A+/Stable for Rs 374 crore perpetual bonds, and Crisil A1+ for its short-term debt programme.

The company has experienced a consistent increase in revenue from operations over the last three years. It increased from Rs 5,129.89 crore in FY23 to Rs 6,543.14 crore in FY24 and Rs 8,497.65 crore in FY25.

Muthoot Fincorp NCD

Bonds IPO details

Calculate your payout

About

Pros and Cons

Other details