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Muthoot Finance has raised INR 30 billion through a bond issuance with a tenure of three years and two months, according to bankers involved in the transaction. The non-banking financial company has priced the bonds at an annual coupon of 8.45%. The issue attracted investor participation following the opening of commitment bids. The bonds carry an AA+ rating from CRISIL and ICRA, indicating high credit quality. The fundraising reflects continued activity in India's corporate debt market, with NBFCs tapping bond markets to secure medium-term funding amid stable interest rate conditions.
Muthoot Finance has raised INR 30 billion through a bond issuance with a tenure of three years and two months, according to market participants familiar with the development in the past week. Advertisement
The non-banking financial company accepted bids for the issue after inviting commitment bids earlier in the day. The bonds have been priced at an annual coupon of 8.45%, reflecting prevailing market conditions and investor appetite for high-rated corporate debt instruments.
The issuance carries an AA+ credit rating from CRISIL and ICRA, indicating a high degree of safety regarding timely servicing of financial obligations. The rating also suggests stable fundamentals and strong market positioning within the NBFC segment.
The total issue size of INR 30 billion includes the base issue along with any greenshoe option, as is customary in corporate bond issuances. The structure allows issuers to retain oversubscription demand, subject to predefined limits, thereby optimising fundraising outcomes.
The transaction reflects continued reliance on debt markets by NBFCs to secure medium-term funding. Bond issuances remain a key funding channel for such institutions, particularly in managing asset-liability mismatches and supporting lending operations.
Market participants indicated that investor demand for high-rated NBFC paper has remained stable, supported by relatively attractive yields and confidence in credit quality. The coupon of 8.45% aligns with recent issuances in similar rating categories and tenures, suggesting consistent pricing trends in the corporate bond market.
The fundraising comes amid steady activity in India's debt capital markets, where issuers across sectors have been accessing funds through bonds to diversify their funding sources beyond traditional bank lending. For NBFCs, such issuances are critical in maintaining liquidity buffers and supporting loan portfolio growth.
While the company has not issued an official statement on the transaction, the successful completion of the bond sale indicates continued market access and investor confidence. The funds raised are typically utilised for onward lending, refinancing of existing debt and general corporate purposes.
The development highlights ongoing depth in India's fixed income market, with institutional investors such as mutual funds, insurance companies and pension funds continuing to participate actively in primary issuances.
The bond issue adds to the pipeline of corporate debt deals observed in the market, reflecting stable credit conditions and sustained investor interest in high-quality issuers within the financial services sector.
Source - Reuters
5th Jun, 2025
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