Muthoot Fincorp Limited has come up with Tranche II of its Non-Convertible Debenture (NCD) issue in March 2026 offering interest rates up to 9.10% per annum. In the current environment where bank fixed deposits typically provide lower returns, such NCDs may attract investors seeking higher yields. However, investors should carefully evaluate the credit ratings, company financials, risks, and tenure options before investing. In this article, we will review Muthoot Fincorp NCD Tranche II (March 2026), including interest rates, financial performance, risks, and whether investors should consider investing.
Muthoot Fincorp NCD Tranche II – Issue Details
Muthoot Fincorp NCD is a public issue of secured, redeemable non-convertible debentures issued under a shelf prospectus.
Key Issue Details
| Particular | Details |
|---|---|
| Issue Opening Date | March 13, 2026 |
| Issue Closing Date | March 23, 2026 |
| Issue Size (Base) | ₹200 Crores |
| Oversubscription Option | ₹400 Crores |
| Total Tranche Issue Size | ₹600 Crores |
| Shelf Prospectus Size | ₹3,000 Crores |
| Face Value | ₹1,000 per NCD |
| Issue Price | ₹1,000 |
| Minimum Investment | ₹10,000 (10 NCDs) |
| Listing | BSE |
| Allotment | First Come First Serve (FCFS) |
Since allotment is on a first-come-first-serve basis, early investors may have better chances of receiving allotment.
Muthoot Fincorp NCD Interest Rates – March 2026
The company is offering multiple investment options with monthly, annual and cumulative interest payout options.
NCD Coupon Rates
| Series 1 | Series 2 | Series 3 | Series 4 | Series 5 | Series 6 | Series 7 | Series 8 | Series 9 | Series 10 | Series 11 | Series 12 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Frequency of Interest Payment | Monthly | Monthly | Monthly | Monthly | Annual | Annual | Annual | Annual | Cumulative | Cumulative | Cumulative | Cumulative |
| Nature | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured | Secured |
| Tenor | 24 Months | 36 Months | 60 Months | 72 Months | 24 Months | 36 Months | 60 Months | 72 Months | 24 Months | 36 Months | 60 Months | 72 Months |
| Coupon (% per Annum) | 8.37% | 8.52% | 8.65% | 8.75% | 8.70% | 8.85% | 9.00% | 9.10% | NA | NA | NA | NA |
| Effective Yield (% per Annum) | 8.70% | 8.85% | 9.00% | 9.10% | 8.69% | 8.84% | 8.99% | 9.09% | 8.70% | 8.85% | 9.00% | 9.10% |
| Amount on Maturity (₹) | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,181.84 | 1,289.99 | 1,538.99 | 1,687.16 |
The maximum effective yield offered is about 9.10% per annum, which is higher than many bank fixed deposits.
Credit Rating of Muthoot Fincorp NCD
The NCD issue has received high credit ratings, indicating relatively lower default risk.
| Rating Agency | Rating | Outlook |
|---|---|---|
| CRISIL | AA- | Positive |
| Brickwork Ratings | AA | Stable |
AA category ratings indicate a high degree of safety regarding timely servicing of financial obligations, though they are not completely risk-free.
Muthoot Fincorp Credit Rating History (Last 5 Years)
Credit ratings provide an indication of a company’s ability to service its debt obligations. Over the last few years, Muthoot Fincorp has largely maintained AA category ratings, which indicate a high degree of safety.
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2026: CRISIL rated the NCDs AA- with Positive outlook, while Brickwork Ratings assigned AA with Stable outlook.
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2025: The company maintained AA category ratings, reflecting stable financial position and strong gold loan portfolio.
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2024: Rating agencies continued to assign AA-/AA ratings, supported by steady growth in lending operations.
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2023: Ratings remained in the AA category, indicating a strong ability to meet debt obligations despite industry competition.
-
2022: Muthoot Fincorp maintained AA-/AA ratings, supported by its established presence in the gold loan segment and large branch network.
Overall, the company has consistently maintained ratings in the AA category over the last several years, indicating a high degree of safety and very low credit risk, though investors should note that NBFC ratings can change depending on liquidity conditions and business performance.
About Muthoot Fincorp Limited
Muthoot Fincorp Limited was incorporated in 1997 and operates as a non-deposit taking NBFC.
The company primarily offers gold loans secured against jewellery and ornaments to meet short-term liquidity requirements of individuals and businesses.
Key Business Highlights
- Around 35.38 lakh gold loan accounts as of September 2025
- 3,757 branches across India
- Presence across 25 states and union territories
- Employee strength of 29,000+ staff
Apart from gold loans, the company also offers:
- Foreign exchange services
- Money transfer services
- Wind energy generation through wind farms
- Real estate development through joint ventures
Muthoot Fincorp Financial Performance
| Year | Total Income (₹ Cr) | Profit After Tax (₹ Cr) | Net Worth (₹ Cr) |
|---|---|---|---|
| FY2025 | 8,511 | 607 | 6,362 |
| FY2024 | 6,554 | 1,047 | 5,811 |
| FY2023 | 5,151 | 646 | 4,257 |
The company has shown consistent growth in income and net worth, though profits fluctuated in FY2025.
Objects of the Issue
The company plans to utilize the proceeds towards:
- Lending and financing activities
- Repayment or prepayment of existing borrowings
- General corporate purposes
These are typical objectives for NBFC debt issuances.
NCD Allocation
| Category | Allocation |
|---|---|
| Institutional Investors | 10% |
| Non-Institutional Investors | 20% |
| HNI Investors | 40% |
| Retail Investors | 30% |
Retail investors can typically apply up to ₹10 lakh in NCD issues.
Risks in Muthoot Fincorp NCD
1. NBFC Sector Risk
NBFCs depend heavily on borrowing and lending cycles. Any liquidity stress could impact operations.
2. Gold Price Risk
Since the company’s primary business is gold loans, volatility in gold prices could affect collateral values.
3. Profit Volatility
Although revenues are increasing, profits have fluctuated in recent years.
4. Interest Rate Risk
If interest rates rise further, newer NCD issues may offer higher yields.
Should You Invest in Muthoot Fincorp NCD March 2026?
Muthoot Fincorp NCD Tranche II offers interest rates up to 9.10%, which appears attractive compared to many bank fixed deposits.
Positive Factors
✔ High credit rating (AA category)
✔ Secured NCDs
✔ Attractive yields compared to fixed deposits
✔ Multiple payout options
✔ Listing on stock exchange providing liquidity
Concerns
✘ NBFC sector risk
✘ Profit fluctuations
✘ Liquidity on exchanges may be limited
Conclusion
Moderate-risk investors seeking higher fixed income returns may consider these NCDs as part of a diversified portfolio. Investors looking for regular income may consider monthly or annual payout options, while long-term investors can look at cumulative options offering yields up to 9.10%.
However, investors should limit exposure to a small portion of their fixed-income portfolio rather than allocating large amounts to a single NCD issue.
