Muthoot FinCorp Limited, a prominent name in the Indian financial sector, has announced the launch of its Tranche V secured, redeemable non-convertible debentures (NCDs). This offering is part of the company's strategy to raise up to ₹350 crore in funds to support its financial operations, including lending, debt repayment, and other general corporate purposes. The NCDs will be available for subscription from April 29 to May 13, 2025, offering investors a chance to invest in a high-yield financial instrument backed by a well-established company.

Key Features of Muthoot FinCorp's Tranche V NCDs

The NCDs are being issued with a face value of ₹1,000 each, making them accessible to a wide range of investors. The interest rate for these NCDs is highly attractive, with annual yields ranging from 9.00% to 10.00%, depending on the chosen tenure. This yield makes the investment appealing to income-seeking investors looking for secure and high-return options. Muthoot FinCorp has structured these NCDs with a variety of tenures, giving investors the flexibility to choose from 24, 36, 60, and 72 months.

The base issue size for the NCDs is ₹100 crore, with an additional green shoe option of up to ₹250 crore. This means that if the demand for the NCDs exceeds expectations, the company has the option to retain the oversubscription, making it possible to raise a total of ₹350 crore.

Rating and Safety of Muthoot FinCorp NCDs

The NCDs have received a rating of CRISIL AA-/Stable from CRISIL Ratings, which indicates that they are of high safety and carry a low credit risk. This rating makes them an attractive option for conservative investors who are seeking secure returns. The AA- rating reflects the company's strong financial position and the low likelihood of default on the repayment of the NCDs.

Additionally, Muthoot FinCorp plans to list these NCDs on the Bombay Stock Exchange (BSE), providing investors with a liquid exit option. This listing will offer liquidity to investors who may want to trade their NCDs before maturity, adding another layer of flexibility to the investment.

Application Process for Muthoot FinCorp NCDs

Investors looking to participate in this NCD issue can apply through a variety of platforms. For investments up to ₹5 lakh, applications must be submitted via UPI payment through intermediaries. For amounts above this threshold, investors can apply using SCSBs (Self-Certified Syndicate Banks) or stock exchange platforms. This ensures that the subscription process is seamless and accessible to a wide range of investors, whether they are using traditional or digital platforms.

Furthermore, Muthoot FinCorp has facilitated investments through its mobile application, Muthoot FinCorp ONE, making it even easier for investors to subscribe to the NCDs. This digital platform is part of the company's effort to provide a modern and convenient investment experience, in line with the growing trend of digital finance.

Muthoot FinCorp's Strong Legacy and Business Presence

Muthoot FinCorp is the flagship company of the Muthoot Pappachan Group, a business conglomerate with a rich legacy spanning over 138 years. The Group has diverse interests across multiple sectors, including financial services, hospitality, automotive, realty, IT services, and alternate energy. This strong and diversified business portfolio provides a solid foundation for Muthoot FinCorp's operations and its ability to offer attractive financial products like these NCDs.

As part of its business model, Muthoot FinCorp has built an extensive network of over 3,700 branches across India, providing a wide reach to investors and customers alike. This vast network allows the company to serve a large customer base and expand its financial services footprint throughout the country.

Use of Funds Raised

The funds raised through the Tranche V NCD issue will be utilized for several strategic purposes. The primary use of the funds will be for lending activities, enabling Muthoot FinCorp to extend more financial assistance to its customers, particularly in the retail and corporate sectors. Additionally, the funds will be directed towards debt repayment, helping the company manage its financial liabilities efficiently. The remaining portion of the funds will be used for general corporate purposes, ensuring the company’s continued growth and expansion.

Why Invest in Muthoot FinCorp NCDs?

Investors are often drawn to NCDs because they provide a predictable stream of income through fixed interest payments, combined with the security of being backed by the company’s assets. The CRISIL AA-/Stable rating offers additional assurance of the company’s ability to meet its repayment obligations, making these NCDs a low-risk investment option.

With annual yields of up to 10%, Muthoot FinCorp’s NCDs offer an attractive return compared to traditional fixed-income instruments like bank deposits and government bonds. This makes them particularly appealing to income-focused investors and those seeking higher yields with moderate risk.

Additionally, Muthoot FinCorp’s long-standing presence in the Indian financial sector, coupled with its extensive branch network and digital platforms, ensures that investors can easily access and manage their investments.

Conclusion: A High-Yield Investment Opportunity

Muthoot FinCorp's Tranche V NCD issue presents a compelling investment opportunity for those looking to earn secure, high-yield returns. With an attractive interest rate of up to 10%, a CRISIL AA- rating, and the option for listing on the BSE, these NCDs offer both security and flexibility. Investors can choose from multiple tenures, making it easy to align the investment with their financial goals. The use of funds for lending, debt repayment, and general corporate purposes further underscores the company’s strong financial standing and commitment to growth.

As India’s financial services sector continues to evolve, Muthoot FinCorp remains a trusted name in the industry, offering investors secure and high-return options backed by a strong legacy and modern digital platforms.

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