9% Muthoot Finance NCD (Tranche III) – Jan-2024 Issue

Muthoot Finance NCD Jan-2024 Issue – Details and Review

Muthoot Finance is coming up with Tranche III secured NCD bonds now. These bonds would open for subscription on 8th January, 2024. Muthoot Finance is the largest gold loan business company in India. The NCD interest rates for Muthoot Finance NCD are up to 9%. These NCDs are offered for 36 months to 60 month tenure. Interest is paid either monthly or annually or on maturity. Should you invest in Muthoot Finance NCD issue of January, 2024? What are the risk factors one should consider before investing in Muthoot Finance Tranche III NCD’s of 2024?

About Muthoot Finance Limited

Muthoot Finance Limited is the flagship company of the Kerala-based business house, The Muthoot Group, which has diversified operations in financial services, healthcare, education and hospitality.

The company derives a major portion of its business from South India (50% of the total gold loan portfolio), where gold loans have traditionally been accepted as a means of availing short-term credit, although it has increased its presence beyond South India over the last few years.

Muthoot Finance NCD – Jan-2024 issue

Here are the issue details.

Subscription opening Date 08-Jan-24
Subscription closure Date 19-Jan-24
Issuing Security Name Muthoot Finance Limited
Security Type Secured, Redeemable, Non-Convertible Debentures (Secured NCDs)
Issue Size (Base) Rs 100 Crores
Issue Size (Option to retain over subscription) Rs 900 Crores
Total issue size Rs 1,000 Crores
Issue price Rs 1,000 per bond
Face value Rs 1,000 per bond
Series Series I to VII
Minimum Lot size 10 bonds and 1 bond there after
Tenure 24, 36, and 60 Months
Interest Payment frequency Monthly and Annually
Listing on Within 6 working days on BSE
Lead Manager A.K. Capital Services Limited
Debenture Trustee/s IDBI Trusteeship Services Limited
Registrar to the issue Link Intime India Private Limited

Muthoot Finance NCD Interest Rates – Jan-2024 Issue

Frequency of Interest Payment Monthly Monthly Annual Annual Annual NA NA
Tenure (Months) 36 60 24 36 60 36 60
Coupon (% per Annum)* 8.75% 8.75% 8.75% 9.00% 9.00% NA NA
Effective Yield (% per Annum)* 8.75% 8.75% 8.75% 9.00% 9.00% 9.00% 9.00%
Amount on Maturity (In Rs.) 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,295.03 1,538.62

*Coupon rate and yield includes additional incentive of 0.5% for HNI, Retail and non institutional investors

What are the credit ratings for these NCDs?

Muthoot Finance NCD rating is assigned as AA+ (Stable) by ICRA. Instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.

How is the company doing in terms of profits?

Its consolidated profits are as below:

  • FY2021 – Rs 3,722.1 Crores
  • FY2022 – Rs 3,954.3 Crores
  • FY2023 – Rs 3,473.5 Crores

Why to invest in these NCDs?

  • Muthoot Finance NCDs offer attractive interest rates where investors can get interest up to 9% per annum.
  • Muthoot Finance has generated stable revenues and margins in the past.
  • It issues secured NCDs. Its secured NCDs are safe compared to unsecured NCDs. In case a company gets wind-up/shut down for some reason, secured NCD investors would get preference in repayment of capital along with interest as those backed up by assets of the company. Hence it is safe to invest in such secured NCD options.

Why not to invest in these NCDs?

  • The Spread of COVID-19 pandemic and the consequent nationwide lockdowns and covid restrictions have impact on its operations and financial condition. Any covid related restrictions or lockdowns in the future would have an impact on company business.
  • Its financial performance is particularly vulnerable to interest rate risk. If they fail to adequately manage interest rate risk in the future it could have an adverse effect on its net interest margin, thereby adversely affecting its business and financial condition.
  • Refer Muthoot Finance NCD Jan-2024 issue prospectus for complete risk factors.

How to invest in Muthoot Finance NCD Online?

This issue is available in only in demat form. You can apply online or through any of the broker website where you are maintaining a demat account. Application forms can be downloaded on the lead manager web site. For more information on this you can refer prospectus.

How safe is Muthoot Finance NCD?

These NCD bonds are rated as AA+ by ICRA. Such credit rating carry low credit risk.

Should you invest in Muthoot Finance NCD?

These NCDs comes with both risks and rewards.

  • Muthoot Finance NCD of Jan-2024 issue offers high interest rates. These NCDs are rated as AA+ by ICRA, which are considered as good (while AAA rated bonds could have been better). Since these are secured NCDs, these are safe investments. Its Sep-23 Tranche-II NCD was subscribed by 7.7x (7.3x by Retail) on day-1 of opening the NCD issue.
  • On the other side, such credit ratings can change in future without any advance intimation. Investors should not forget about some of the NBFC companies delaying the interest as well principal re-payments in the past.

High risk investors can invest in these NCDs for short term to medium term.

Suresh KP


  1. Hi Suresh, Thanks for the detailed write-up.

    >> *Coupon rate and yield includes additional incentive of 0.5% for HNI, Retail and non institutional investors

    goldenpi.com – This is showing Additional incentive of 1% per annum for select categories. Please share your inputs.


  2. Dear Suresh,
    A question here which often comes to the mind of ordinary investors pls:
    Why I should prefer the NBFC ncd against FD in a small finance Bank which offers better interest rate and deposit insurance upto 5 Lacs ?
    Thks, Tom

    1. Good Question. Here are some comparison points for your reference.

      1) Safety:
      Small Finance Bank FDs: Offer deposit insurance for up to Rs. 5 lakhs.
      NBFC Secured NCDs: Lack deposit insurance, relying on the financial health of the NBFC.

      2) Risks:
      Small Finance Bank FDs: Lower risk, regulated with government-backed insurance.
      NBFC Secured NCDs: Higher risk due to market fluctuations and credit risk, no deposit insurance.
      3) Returns:
      Small Finance Bank FDs: Generally lower returns compared to NCDs.
      NBFC Secured NCDs: Potential for higher returns.

      4) Security:
      Small Finance Bank FDs: Regulated security with oversight.
      NBFC Secured NCDs: Asset-backed security, collateralized by underlying assets.

      5) Insurance:
      Small Finance Bank FDs: DICGC insurance up to Rs. 5 lakhs.
      NBFC Secured NCDs: No deposit insurance.

      6) Liquidity:
      Small Finance Bank FDs: Generally more liquid, with premature withdrawal options.
      NBFC Secured NCDs: Limited liquidity, especially in the secondary market.

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