Muthoot Capital secures ₹150 cr at 9.25% to fund AUM chase
Two-year NCDs equal to 44% of market cap back ambitious plan to nearly double AUM to ₹10,000 cr by FY29. Coupon is cost-effective given recent credit upgrade to AA-.
— 2 earlier stories on Muthoot Capital Services Ltd. →What's new
- Board approves ₹150 cr secured NCD issue on a private placement basis.
- Two-year bonds at 9.25% coupon with quarterly interest and bullet repayment.
- Proceeds to support near-doubling of AUM to ₹10,000 cr by FY29.
Why this matters
For a nano-cap NBFC with ₹344 cr market cap and debt/equity of 4.33, raising ₹150 cr at 9.25% provides cheap capital to fuel aggressive growth. The 1.1x asset coverage on receivables offers some security, but the profitability pressure (PAT down 16.4% trailing) makes execution critical.
What we're watching
- Subscription take-up and listing on BSE; any anchor investor participation.
- AUM growth trajectory against the FY29 target of ₹10,000 cr.
- Impact on debt ratios and asset quality as the balance sheet expands.
The full read
Muthoot Capital is betting big on its growth story. The board has approved ₹150 crore of secured NCDs on a private placement basis — that's 44% of its ₹344 crore market cap. The two-year bonds carry a 9.25% coupon with quarterly interest and bullet repayment, cost-effective funding for a nano-cap NBFC that recently earned a credit upgrade. The stated goal: push AUM to ₹10,000 crore by FY29, nearly double where it is now. The funding is secured against loan receivables with 1.1x coverage. But the balance sheet already shows a debt/equity of 4.33 and trailing net profit fell 16.4%. The open question is whether the company can sustain asset quality while scaling aggressively. For now, it has the capital to try.
Questions answered
- Why is the 9.25% coupon rate considered attractive?
- At 9.25%, Muthoot Capital raises debt at a rate below its historical cost of funds and well within NBFC norms, especially given its recent CRISIL upgrade to AA-. For a nano-cap, this is cost-effective funding.
- How does this NCD compare to the company's market cap?
- The ₹150 cr issue equals about 44% of Muthoot Capital's ₹344 cr market cap, making it a large relative capital event that significantly boosts liquidity.
- What security do investors get on these debentures?
- The NCDs are secured against standard loan receivables with an asset coverage ratio of 1.1 times, meaning the collateral value exceeds the principal by 10%.
- Can the company achieve its ₹10,000 cr AUM target?
- The target implies nearly doubling AUM from current levels by FY29. With the ₹150 cr infusion, Muthoot Capital has fresh firepower, but recent profitability pressure (PAT down 16.4%) and high debt/equity (4.33) pose risks to sustained growth.
Muthoot Capital Services Ltd.
Latest quarter · Mar 2026
Leverage & growth
Story so far
All notes on MUTHOOTCAP →- 22 Jun 2026 · 7:00 PM IST Muthoot Capital secures ₹150 cr at 9.25% to fund AUM chase
- 13d ago CRISIL upgrades Muthoot Capital to AA- despite profit crash
- 14d ago Muthoot Capital sells ₹85 cr in vehicle loans to steady the ship after profit crash