Muthoottu Mini Financiers Limited is launching its Secured, Redeemable, Non-Convertible Debentures (NCDs) issue in August 2025. The issue will open on August 18, 2025, and close on September 1, 2025, with a base size of ₹200 crore and a green-shoe option of an additional ₹100 crore, totaling up to ₹300 crore. With attractive coupon rates of up to 10.50% per annum, investors are keen to evaluate whether these NCDs are a good fit for their fixed-income portfolio. In this article, we provide a comprehensive Muthoottu Mini Financiers NCD Review covering company background, NCD details, coupon rates, credit ratings, financials, reasons to invest, risk factors, and our conclusion on whether to invest or avoid.
About the Company
Muthoottu Mini Financiers Limited is a non-deposit taking NBFC-ML (Non-Banking Financial Company – Micro Lending) primarily engaged in providing gold loans against household jewellery across several Indian states including Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Haryana, Maharashtra, Gujarat, Uttar Pradesh, Goa, and the Union Territories of Puducherry and Delhi.
As of March 31, 2025:
- The company had 6,13,863 gold loan accounts, compared to 5,57,249 in FY24.
- Total gold loan portfolio stood at ₹38,125.6 crore, contributing 91% of total loans.
- The company operated 958 branches with 5,421 employees.
In addition to gold loans, it offers microfinance loans, depository services, insurance distribution, money transfer, PAN card, and travel agency services. Its customers are largely from rural and semi-urban areas.
NCD Issue Details
- NCD Type: Secured, Redeemable, Non-Convertible Debentures
- Issue Size: Base – ₹200 crore, Green-shoe – ₹100 crore, Total – ₹300 crore
- Face Value: ₹1,000 per NCD
- Issue Price: ₹1,000 per NCD
- Minimum Application: 10 NCDs (₹10,000)
- Listing: BSE
- Allotment Basis: First Come, First Serve
- Debenture Trustee: Mitcon Credentia Trusteeship Services Ltd.
Allocation
- Institutional Investors – 30%
- Non-Institutional Investors – 30%
- HNI – 30%
- Retail – 10%
Interest Rates / Coupon Rates
The issue offers interest rates between 9.00% and 10.50% depending on the tenure and payment mode:
| Series | Tenor | Interest Payment | Coupon Rate (p.a.) | Effective Yield (p.a.) |
|---|---|---|---|---|
| 1 | 18 months | Monthly | 9.00% | 9.38% |
| 2 | 24 months | Monthly | 9.25% | 9.65% |
| 3 | 36 months | Monthly | 9.75% | 10.19% |
| 4 | 60 months | Monthly | 10.25% | 10.74% |
| 5 | 60 months | Annual | 10.50% | 10.49% |
Credit Rating
The NCDs are rated A (Stable) by ICRA, indicating adequate safety with low credit risk. However, this is not the highest rating, suggesting moderate risk compared to AAA-rated bonds.
Objects of the Issue
The company proposes to use the net proceeds for:
- Onward lending and financing activities.
- Repayment or prepayment of principal and interest on existing borrowings.
- General corporate purposes.
Company Financials
Muthoottu Mini Financiers – Financial Highlights (₹ in Crores)
| Particulars | FY24 | FY25 |
|---|---|---|
| Assets | 4,315.57 | 4,959.87 |
| Total Income | 671.84 | 815.15 |
| Profit After Tax | 77.83 | 94.17 |
| Net Worth | 685.78 | 769.79 |
- Revenue grew by 21% YoY.
- PAT grew by 21% YoY.
- Gold loan AUM forms the bulk of its portfolio, providing steady income.
Why to Invest in Muthoottu Mini Financiers NCD August 2025
- Attractive interest rates up to 10.50%, higher than bank FDs and many corporate deposits.
- Secured NCDs backed by the company’s assets.
- Strong presence in South India with nearly 1,000 branches.
- Consistent growth in revenue and profitability.
- Diversified services beyond gold loans.
Why Not to Invest in Muthoottu Mini Financiers NCD August 2025
- Credit rating of A (Stable) is not as strong as higher-rated peers (AA or AAA).
- Heavy dependence on gold loan business – 91% of portfolio, concentration risk.
- Exposure to fluctuations in gold prices which may impact loan recovery.
- Competition from larger gold loan NBFCs like Muthoot Finance and Manappuram Finance.
- Retail allocation is just 10%, limiting availability for small investors.
How to Apply for Muthoottu Mini Financiers NCD?
- Investors can apply online through their demat account with stockbrokers.
- Applications can also be made via ASBA facility available in net banking.
- Physical forms can be submitted through authorized intermediaries.
- Allotment will be on a first-come-first-serve basis.
FAQs on Muthoottu Mini Financiers NCD August 2025
1. What are the NCD issue dates?
The issue opens on August 18, 2025, and closes on September 1, 2025.
2. What is the face value and minimum investment?
Face value is ₹1,000 per NCD and minimum application is 10 NCDs (₹10,000).
3. What is the highest coupon rate offered?
The highest coupon is 10.50% per annum for 60 months annual payout option.
4. Are these NCDs secured?
Yes, the NCDs are secured against the assets of the company.
5. What is the credit rating of this NCD issue?
Rated A (Stable) by ICRA, indicating adequate safety.
6. How will the allotment be done?
Allotment will be done on a first-come-first-serve basis.
7. Should I invest in this NCD issue?
Investors looking for high fixed returns and willing to take moderate risk may consider investing. Conservative investors may prefer higher-rated options.
Conclusion – Invest or Avoid?
Muthoottu Mini Financiers NCD August 2025 offers attractive coupon rates up to 10.50% and comes with the comfort of being secured instruments. The company has demonstrated consistent growth in its gold loan business. However, the credit rating of A (Stable) is lower compared to AAA-rated NCDs, and there is a high dependence on gold loan business, making it moderately risky.
Recommenation: Investors with moderate to high risk appetite who seek higher returns than bank FDs can consider investing. Conservative investors may avoid and look for safer, AAA-rated NCDs.
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Sir,
In your analysis please provide information on TDS also