Non-Convertible Debentures (NCDs) continue to attract conservative investors who are looking for predictable income and relatively higher returns than bank fixed deposits. The Kosamattam Finance NCD February 2026 issue is another public debt offering in this space, backed by a gold-loan-focused NBFC with a long operating history in southern and central India. With interest rates going up to around 10% per annum, this issue is likely to catch the attention of income-seeking investors, especially those comfortable with NBFC credit risk.
In this review, we break down the Kosamattam Finance NCD February 2026 issue in the familiar myinvestmentideas.com style, covering company background, issue structure, interest rates, ratings, financials, pros and cons, application process, FAQs, and a clear conclusion on whether this NCD fits your portfolio.
About Kosamattam Finance Ltd.
Kosamattam Finance Limited is a non-deposit taking NBFC (Middle Layer) primarily engaged in the gold loan business. The company lends against household gold jewellery and caters to a wide range of customers, including small business owners, traders, farmers, salaried individuals, and families. Over the years, gold loans have remained its core business, contributing to more than 99% of its loan book.
As of September 30, 2025, the company had over 11.6 lakh gold loan accounts with a total portfolio value exceeding ₹6,100 crore. The company operates a wide branch network of around 981 branches spread across Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Uttar Pradesh, Telangana, Puducherry, and Delhi. With nearly 4,000 employees, Kosamattam has built a strong regional presence, particularly in South India.
Apart from gold loans, the company also offers select fee-based services such as microfinance, money transfer, foreign exchange, power generation, and travel-related services, though these contribute a relatively small portion to overall revenue.
Kosamattam Finance NCD February 2026 – Issue Details
Here are the key details of the Kosamattam Finance NCD public issue:
- Issue Type: Secured, Redeemable, Non-Convertible Debentures
- Issue Size: ₹200 crore (Base issue of ₹100 crore with an option to retain oversubscription of ₹100 crore)
- Face Value: ₹1,000 per NCD
- Issue Price: ₹1,000 per NCD
- Minimum Investment: ₹10,000 (10 NCDs)
- Market Lot: 1 NCD
- Issue Opens: February 9, 2026
- Issue Closes: February 23, 2026
- Listing: BSE
- Basis of Allotment: First Come First Serve
- Lead Manager: Vivro Financial Services Pvt. Ltd.
- Debenture Trustee: Vistra ITCL India Ltd.
- Registrar: KFin Technologies Ltd.
These NCDs are secured in nature, meaning they are backed by a charge on the company’s assets, which offers some level of comfort compared to unsecured debt.
Interest Rates and Tenure Options
The Kosamattam Finance NCD February 2026 issue comes with multiple series offering different tenures and interest payment options, including monthly and cumulative.
Key highlights include:
- Tenure ranges from 15 months to 84 months
- Interest rates range from around 8.5% per annum to a maximum effective yield of approximately 10.47% per annum
- Monthly interest options are available for investors seeking regular income
- Cumulative options are available for those who prefer a lump sum at maturity
Longer tenure series typically offer higher effective yields, making them more attractive for investors willing to lock in their funds for up to 5 to 7 years.
| Details | Series 1 | Series 2 | Series 3 | Series 4 | Series 5 | Series 6 | Series 7 | Series 8 |
|---|---|---|---|---|---|---|---|---|
| Frequency of Interest Payment | Cumulatie | Monthly | Monthly | Cumulatie | Monthly | Cumulatie | Monthly | Cumulatie |
| Tenor | 15 Months | 24 Months | 36 Months | 36 Months | 42 Months | 50 Months | 60 Months | 84 Months |
| Coupon (% per Annum) | NA | 8.50% | 9.00% | NA | 9.75% | NA | 10.00% | NA |
| Effectie Yield (% per Annum) | 8.00% | 8.84% | 9.38% | 9.25% | 10.20% | 10.22% | 10.47% | 10.41% |
| Amount on Maturity (In ₹.) | 1,101.00 | 1,000.00 | 1,000.00 | 1,304.00 | 1,000.00 | 1,500.00 | 1,000.00 | 2,000.00 |
Credit Rating
The NCDs have been rated “A” with a Stable outlook by India Ratings & Research Private Limited.
An “A” rating indicates an adequate degree of safety regarding timely servicing of financial obligations and suggests low credit risk, though it is not in the highest safety category. Investors should note that NBFC NCDs generally carry higher risk than bank deposits, even when rated A.
Credit Rating Trend (Last 5 Years)
Based on the India Ratings history and disclosures in the prospectus, the company’s credit rating has shown gradual improvement over the last few years.
Key rating movements:
- Aug 2021: IND BBB+ / Stable
- Feb 2023 – Dec 2024: IND A- / Stable
- July 2025: Upgraded to IND A / Stable
- Nov 2025: IND A / Stable – affirmed
- Jan 2026 (current issue): IND A / Stable
Overall, the company has moved from the BBB+ category in 2021 to the A category by 2025–2026, indicating a gradual strengthening of its credit profile, though it still remains below the top-rated AA or AAA categories.
Objects of the Issue
The company plans to utilize the funds raised from this NCD issue for the following purposes:
- Onward lending as part of its regular business operations
- Repayment of interest and principal of existing borrowings
- General corporate purposes
This indicates that a significant portion of the funds will go toward supporting business growth and managing existing liabilities.
Company Financials
Here is a snapshot of the company’s recent financial performance (₹ in crore):
- Total Assets (Mar 2025): 6,405.69
- Total Income (Mar 2025): 900.43
- Profit After Tax (Mar 2025): 127.06
- Net Worth (Mar 2025): 1,062.84
Over the last three financial years, Kosamattam Finance has shown steady growth in income, profitability, and net worth. Its business model benefits from gold-backed lending, which typically has lower default risk compared to unsecured retail loans. However, performance is still linked to gold price movements and regional economic conditions.
Why to Invest in Kosamattam Finance NCD February 2026
- Higher returns compared to bank fixed deposits, especially in longer tenure series
- Secured NCDs, offering some asset backing
- Multiple options for monthly income and cumulative growth
- Established gold loan NBFC with a long operating track record
- A credit rating suggests adequate safety and low credit risk
These features make this NCD suitable for investors seeking predictable income and willing to take moderate credit risk for better returns.
Why You Should Avoid This NCD
- A-rated NCDs carry higher risk than AAA-rated bonds and bank deposits
- Business concentration in gold loans exposes the company to fluctuations in gold prices and regulatory changes
- Long lock-in periods for higher yield options reduce liquidity
- Interest from NCDs is taxable as per your income tax slab, which can significantly reduce post-tax returns
Risk-averse investors or those in higher tax brackets may find post-tax returns less attractive.
How to Apply for Kosamattam Finance NCD
Investors can apply for this NCD issue through the ASBA or UPI process using:
- Stockbroker platforms
- BSE Direct
- Online bond platforms like GoldenPi and IndiaBonds
You will need a demat account, PAN, and a linked bank account or UPI ID. After selecting the desired series and quantity, approve the UPI mandate or ASBA block to complete your application. Allotment is done on a first come first serve basis.
FAQs
- What is the minimum investment in Kosamattam Finance NCD February 2026?
The minimum investment is ₹10,000, which equals 10 NCDs. - Are these NCDs safe?
They are rated A and secured, indicating moderate safety, but they still carry higher risk than bank fixed deposits. - Will I get monthly income from this NCD?
Yes, selected series offer monthly interest payout options. - Where will these NCDs be listed?
The NCDs are proposed to be listed on the BSE. - Can I sell these NCDs before maturity?
Yes, once listed, you can sell them on the stock exchange, subject to market liquidity and price availability. - Is the interest earned taxable?
Yes, interest income from NCDs is fully taxable as per your income tax slab. - Who should consider investing in this NCD?
Investors looking for higher fixed income returns and willing to accept moderate NBFC credit risk can consider this issue.
Conclusion – Should You Invest or Avoid?
The Kosamattam Finance NCD February 2026 issue offers attractive interest rates of up to around 10.4% effective yield, which is significantly higher than most traditional fixed-income products. The secured structure and A credit rating provide a reasonable level of comfort, especially for investors familiar with NBFC debt.
However, this is not a low-risk investment. The company’s heavy dependence on gold loans, exposure to regional markets, and the inherent risks of NBFC lending mean that conservative investors should tread carefully. If you are in a high tax bracket or prefer capital safety over higher returns, you may want to look at AAA-rated bonds or bank deposits instead.
For moderate-risk investors seeking higher income and willing to diversify a small portion of their debt portfolio, this NCD can be considered selectively, preferably in shorter to medium tenures rather than the longest lock-in options.
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