Investors looking for fixed-income investment options often explore Non-Convertible Debentures (NCDs) as they generally offer higher interest rates compared to bank fixed deposits. Muthoot Mercantile Limited has launched its latest secured NCD issue that offers effective yields of up to 12.07% per annum depending on the series selected.
In this article, let us review the Muthoot Mercantile NCD May 2026 issue details, interest rates, credit ratings, financial performance, risks and whether investors may consider these NCDs based on their risk appetite.
About Muthoot Mercantile Limited
Muthoot Mercantile Limited is a non-deposit taking NBFC primarily engaged in gold loan financing. The company also offers investment services, health insurance distribution, forex services and money transfer facilities.
The company has been operating in the gold loan business for over three decades and has expanded its presence across multiple states through more than 300 branches. It is promoted by Mathew Mathaininan and Richi Mathew. The company is headquartered in Thiruvananthapuram, Kerala.
Gold loans continue to be the core business segment and contribute significantly to the company’s overall loan portfolio.
Muthoot Mercantile NCD May 2026 Issue Details
| Particulars | Details |
|---|---|
| Issue Opens | May 29, 2026 |
| Issue Closes | June 11, 2026 |
| Security Type | Secured Redeemable NCDs |
| Face Value | ₹1,000 per NCD |
| Issue Price | ₹1,000 per NCD |
| Base Issue Size | ₹75 Crores |
| Green Shoe Option | ₹75 Crores |
| Total Issue Size | ₹150 Crores |
| Listing | BSE |
| Minimum Investment | ₹10,000 (10 NCDs) |
| Market Lot | 1 NCD |
| Allotment Basis | First Come First Serve |
| Registrar | KFin Technologies Limited |
| Debenture Trustee | Mitcon Credentia Trusteeship Services Ltd |
Muthoot Mercantile NCD Interest Rates 2026
| Series | Tenure | Interest Option | Coupon Rate | Effective Yield |
|---|---|---|---|---|
| I | 400 Days | Monthly | 10.50% | 11.02% |
| II | 400 Days | Cumulative | NA | 10.94% |
| III | 24 Months | Monthly | 10.75% | 11.30% |
| IV | 24 Months | Cumulative | NA | 11.36% |
| V | 36 Months | Monthly | 11.00% | 11.57% |
| VI | 36 Months | Cumulative | NA | 11.60% |
| VII | 73 Months | Cumulative | NA | 12.07% |
The highest effective yield is available under Series VII, which has a tenure of 73 months and doubles the investment amount at maturity.
Credit Rating of Muthoot Mercantile NCD
The NCDs are rated CRISIL BBB+/Stable.
A BBB+ rating indicates moderate degree of safety regarding timely servicing of financial obligations and carries moderate credit risk. While the NCDs are investment grade, they are not in the high-safety AA or AAA category.
| Rating Agency | Rating | Outlook |
|---|---|---|
| CRISIL Ratings | BBB+ | Stable |
Investors should understand that lower-rated NCDs generally offer higher interest rates to compensate for the additional credit risk.
Credit Rating Trend in the Last 3-5 Years
As per the CRISIL rating rationale released in April 2026, the current NCD issue has been assigned a CRISIL BBB+/Stable rating. The rating history section in the CRISIL report does not indicate any historical CRISIL NCD ratings for the previous three years and shows the current rating assignment as the available rating record.
Investors may note that the company has previously accessed the debt market multiple times, but the present issue is rated by CRISIL with BBB+/Stable outlook.
Objects of the Issue
The company proposes to utilize the net proceeds from the issue for the following purposes:
| Purpose | Amount (₹ Crores) |
|---|---|
| Lending activities and repayment/prepayment of borrowings | 111.59 |
| General corporate purposes | 37.20 |
| Total | 148.79 |
A significant portion of the funds will be used for business expansion and refinancing existing borrowings.
Company Financials
The company has shown steady growth in revenue and profits over the last three financial years.
| Particulars (₹ Crores) | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Assets | 990.80 | 792.05 | 606.51 |
| Revenue | 166.43 | 131.78 | 94.67 |
| Profit After Tax | 28.09 | 24.28 | 18.19 |
Revenue increased by about 26% between FY2024 and FY2025 while profit after tax grew by around 16%, indicating continued business growth.
Why One May Consider Investing
- Attractive interest rates of up to 11% coupon and effective yields up to 12.07%.
- Secured NCDs backed by company assets.
- Established gold loan business with long operating history.
- Consistent growth in revenue, assets and profits.
- Listed on BSE, providing liquidity opportunities.
- Suitable options available for both monthly income and cumulative growth investors.
Risks and Factors Investors Should Consider
- The NCDs are rated BBB+, which is lower than many AA or AAA rated NCDs available in the market.
- The company operates largely in the gold loan segment, leading to concentration risk.
- NBFCs are exposed to regulatory and funding risks.
- Interest rate movements can impact NCD market prices if investors wish to exit before maturity.
- Liquidity on stock exchanges may be limited after listing.
How to Apply for Muthoot Mercantile NCDs?
Investors can apply through:
- Net banking ASBA facility offered by banks.
- Stock brokers providing NCD application facilities.
- Demat account platforms such as Zerodha, Upstox, Angel One and others.
- UPI-based applications for eligible retail investors.
Applicants should have a demat account to receive NCD allotment.
Should You Invest in Muthoot Mercantile NCD May 2026?
Muthoot Mercantile NCDs offer attractive yields ranging between 10.94% and 12.07%, which are higher than most bank fixed deposits. The company has demonstrated growth in assets, revenue and profitability over the last few years.
However, investors should note that the issue carries a CRISIL BBB+/Stable rating, which indicates moderate credit risk. Investors seeking higher safety may prefer AA or AAA-rated NCDs even if they offer slightly lower returns.
For investors who understand the risks associated with BBB-rated instruments and are looking for higher fixed-income returns, these NCDs may be evaluated as part of a diversified debt portfolio. Investors should read the prospectus carefully and assess whether the risk-reward profile matches their financial goals before investing.
Frequently Asked Questions (FAQs)
1. What is the opening date of Muthoot Mercantile NCD May 2026?
The issue opens on May 29, 2026.
2. What is the closing date of the NCD issue?
The issue closes on June 11, 2026.
3. What is the minimum investment amount?
The minimum investment is ₹10,000.
4. What is the highest interest rate offered?
The highest coupon rate is 11% per annum.
5. What is the highest effective yield?
The highest effective yield is 12.07% per annum.
6. Are these NCDs secured?
Yes, all series are secured NCDs.
7. Are the NCDs listed on stock exchanges?
Yes, the NCDs are proposed to be listed on BSE.
