Investors looking for predictable income often turn to Non-Convertible Debentures (NCDs) as an alternative to traditional fixed deposits. In February 2026, Muthoot Fincorp Limited is back in the market with its Tranche 1 public issue of secured NCDs, offering interest rates of up to 9.10% per annum across multiple tenures and payout options. With the backing of a long-standing gold-loan focused NBFC and strong credit ratings, this issue has already drawn attention from retail and high-net-worth investors seeking steady returns with a relatively higher yield.
In this review, we break down the key features of the Muthoot Fincorp NCD February 2026 issue, analyze the company’s financials, highlight the pros and risks, and help you decide whether this fixed-income opportunity fits into your portfolio.
About Muthoot Fincorp Limited
Muthoot Fincorp Limited was incorporated in 1997 and is a non-deposit-taking Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India. The company is best known for its gold loan business, catering to both personal and business borrowers who need short-term liquidity.
As of December 31, 2025, the company operated over 3,700 branches across 25 states and union territories, supported by a workforce of nearly 30,000 employees. Its loan book is largely secured by gold ornaments and jewellery, which provides a natural layer of asset-backed security to its lending model.
Apart from gold loans, Muthoot Fincorp is also involved in foreign exchange and money transfer services as a sub-agent for registered money transfer operators. The company has diversified interests in wind energy generation and real estate through joint ventures, adding non-lending income streams to its overall business profile.
NCD Issue Details
| Particular | Details |
|---|---|
| Issuer | Muthoot Fincorp Limited |
| Issue Type | Secured, Redeemable, Non-Convertible Debentures (NCDs) |
| Tranche | Tranche 1 – February 2026 |
| Issue Size (Shelf) | ₹2,737.04 Crore |
| Base Issue Size | ₹200 Crore |
| Oversubscription Option | Up to ₹400 Crore |
| Total Tranche Size | ₹600 Crore |
| Face Value | ₹1,000 per NCD |
| Issue Price | ₹1,000 per NCD |
| Minimum Investment | 10 NCDs (₹10,000) |
| Market Lot | 1 NCD |
| Issue Opens | February 3, 2026 |
| Issue Closes | February 16, 2026 |
| Listing | BSE |
| Allotment Basis | First Come First Served (FCFS) |
| Lead Manager | Nuvama Wealth Management Ltd. |
| Debenture Trustee | Vardhman Trusteeship Pvt. Ltd. |
| Registrar | Integrated Registry Management Services Pvt. Ltd. |
| Credit Ratings | CRISIL AA- (Positive), Brickwork AA (Stable) |
Interest Rates and Tenure Options
Muthoot Fincorp has structured this issue with multiple series to suit different income preferences. Investors can choose between monthly, annual, and cumulative interest payout options across tenures ranging from 24 months to 72 months.
| Series | Interest Payout | Tenure in Months | Coupon Rate (% p.a.) | Effective Yield (% p.a.) | Amount on Maturity (₹ per NCD) |
|---|---|---|---|---|---|
| 1 | Monthly | 24 | 8.37% | 8.70% | 1,000 |
| 2 | Monthly | 36 | 8.52% | 8.85% | 1,000 |
| 3 | Monthly | 60 | 8.65% | 9.00% | 1,000 |
| 4 | Monthly | 72 | 8.75% | 9.10% | 1,000 |
| 5 | Annual | 24 | 8.70% | 8.70% | 1,000 |
| 6 | Annual | 36 | 8.85% | 8.84% | 1,000 |
| 7 | Annual | 60 | 9.00% | 8.99% | 1,000 |
| 8 | Annual | 72 | 9.10% | 9.10% | 1,000 |
| 9 | Cumulative | 24 | NA | 8.70% | 1,181.57 |
| 10 | Cumulative | 36 | NA | 8.85% | 1,289.99 |
| 11 | Cumulative | 60 | NA | 9.00% | 1,538.99 |
| 12 | Cumulative | 72 | NA | 9.10% | 1,686.76 |
Credit Ratings
The NCDs have received strong credit ratings from two independent agencies. CRISIL has assigned a rating of AA- with a positive outlook, while Brickwork Ratings has given a rating of AA with a stable outlook.
These ratings indicate a high degree of safety and very low credit risk, suggesting that the company has a strong capacity to meet its financial obligations on time. While ratings are not a guarantee, they provide a useful benchmark for risk assessment when comparing different NCD issues in the market.
Objects of the Issue
The primary objective of this tranche is to raise funds for on-lending and financing activities, which form the core business of Muthoot Fincorp. A portion of the proceeds will also be used for repayment or prepayment of existing loan liabilities.
The remaining funds will be allocated toward general corporate purposes, which may include operational expenses, business expansion, and strengthening the company’s overall financial position.
Company Financials
A look at the company’s recent financial performance provides insight into its growth and stability.
For the financial year ended March 31, 2025, Muthoot Fincorp reported total assets of approximately ₹45,456 crore, up from ₹38,704 crore in the previous year. Total income for FY2025 stood at ₹8,511 crore, showing steady growth from ₹6,554 crore in FY2024.
Profit after tax for FY2025 was around ₹608 crore, while net worth increased to ₹6,363 crore, reflecting a stronger capital base. Although there was a dip in profit compared to FY2024, the overall trend in assets and income indicates business expansion and scale.
These numbers suggest that the company maintains a healthy balance sheet, supported by its secured lending model and wide branch network.
Why to Invest
One of the biggest attractions of this NCD issue is the relatively high interest rate compared to traditional fixed deposits, especially for investors in higher tax brackets who are looking to diversify into market-linked debt instruments.
The NCDs are secured, meaning they are backed by a charge on the company’s assets, which offers an additional layer of comfort. Strong AA category ratings further enhance investor confidence.
The availability of multiple tenures and payout options allows investors to align the investment with their cash flow needs. Listing on the BSE also provides liquidity, which is not available in most fixed deposits.
Why Not to Invest
Despite strong ratings, NCDs carry higher risk compared to bank fixed deposits, which are covered under deposit insurance up to a certain limit. In the event of financial stress at the company level, NCD investors may face delays or losses.
Interest from NCDs is fully taxable as per the investor’s income tax slab, which can significantly reduce post-tax returns for those in higher tax brackets.
The gold loan business, while secured, is still exposed to fluctuations in gold prices and regulatory changes affecting NBFCs. These factors can impact the company’s profitability and repayment capacity over the long term.
How to Apply
Retail investors can apply for this NCD issue through the ASBA or UPI mechanism using supported bank or broker platforms. Applications can also be made through platforms like GoldenPi and Indiabonds by selecting the desired series, entering demat and PAN details, and approving the UPI mandate.
The NCDs will be credited to the investor’s demat account upon allotment, and interest payments will be made directly to the registered bank account.
FAQs
- Are Muthoot Fincorp NCDs safe to invest in?
These NCDs are rated in the AA category and are secured, indicating a high degree of safety. However, they are not risk-free and carry credit risk associated with the issuer. - What is the minimum investment amount?
The minimum investment is ₹10,000, which corresponds to 10 NCDs of ₹1,000 each. - Can I sell these NCDs before maturity?
Yes, the NCDs are proposed to be listed on the BSE, and you can sell them in the secondary market, subject to liquidity and market conditions. - How is the interest taxed?
Interest earned is taxed as per your income tax slab rate. There is no tax deduction at source for listed NCDs, but you must declare the income while filing returns. - What happens at maturity for cumulative options?
For cumulative series, you will receive the principal along with compounded interest as a lump sum at the end of the tenure. - Who should consider investing in this issue?
Investors seeking higher fixed income returns than bank FDs and who are comfortable with moderate credit risk may consider this NCD.
Conclusion – Should You Invest?
The Muthoot Fincorp NCD February 2026 issue offers a balanced mix of attractive interest rates, strong credit ratings, and the comfort of secured backing. It can be a suitable option for investors looking to enhance their fixed-income portfolio with higher yields than traditional deposits.
However, it is important to remember that NCDs are not completely risk-free. Investors should assess their risk tolerance, tax implications, and overall asset allocation before investing. If you are comfortable with moderate credit exposure and are looking for predictable income or long-term compounding, this issue can be considered as part of a diversified debt portfolio.
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The interest rate offered is very tight this time.
It is requested that all or at least last 4/5 years credit rating should be given in a chronological sequence so that people can understand how the credit rating has moved over a mid-term period of time. This would make their judgement more right.
Good point.While it is not available at single place, we may need to dig archives to get this info. Can try.
It should be available in RHP/DRHP. The point is that if such a crucial point is available upfront, then it helps in understanding how the rating has moved in the past.
Thank you.
Its available, but only for couple of years. Now I started adding last 5 years trend of NCD ratings in our new articles.
Errata.
Thanks for your review.
Suresh,
Thanks for your revie