Introduction
Muthoot Fincorp Limited, one of India's leading non-banking financial companies (NBFCs), has launched the Tranche IV issue of its Secured Redeemable Non-Convertible Debentures (NCDs) in June 2026. The public issue aims to raise up to ₹600 crore and offers investors multiple investment options with coupon rates of up to 9.25% per annum.
The NCD issue provides investors with an opportunity to earn fixed income through monthly, annual, or cumulative interest payout options across different tenures. Backed by a AA/Stable credit rating, the issue may appeal to investors seeking predictable returns while understanding the associated credit and interest rate risks.
In this blog, we explain everything you need to know about the Muthoot Fincorp NCD Tranche IV issue, including its features, interest rates, risks, and whether it may suit your investment portfolio.
What is an NCD?
A Non-Convertible Debenture (NCD) is a fixed-income debt instrument issued by companies to raise capital from investors.
Unlike convertible debentures, NCDs cannot be converted into equity shares. Instead, investors receive regular interest payments or a lump sum on maturity, depending on the chosen option.
NCDs are commonly used by companies to fund business expansion, repay borrowings, and meet general corporate requirements.
About Muthoot Fincorp Limited
Muthoot Fincorp Limited is a leading NBFC providing a range of financial services across India.
Its key business segments include:
- Gold Loans
- Business Loans
- Loan Against Property
- Two-Wheeler Loans
- Microfinance
- Insurance Distribution
- Wealth Management Services
The company has built a wide branch network across the country and primarily focuses on lending against gold ornaments.
Muthoot Fincorp NCD Tranche IV – Key Highlights
|
Particular |
Details |
|
Issue Opening Date |
19 June 2026 |
|
Issue Closing Date* |
3 July 2026 |
|
Issue Size |
₹200 crore |
|
Overall Issue Size |
Up to ₹600 crore (including oversubscription) |
|
Instrument |
Secured Redeemable Non-Convertible Debentures |
|
Face Value |
₹1,000 per NCD |
|
Minimum Investment |
₹10,000 (10 NCDs) |
|
Listing |
BSE |
|
Allotment Basis |
First Come, First Served |
*The company may close the issue earlier or extend the closing date, subject to regulatory approvals.
Interest Rates Offered
The issue offers multiple investment options with coupon rates of up to 9.25% per annum, depending on the selected series and tenure.
Investors can choose from:
- Monthly Interest Payout
- Annual Interest Payout
- Cumulative Option
Different series are available across tenures of:
- 24 Months
- 36 Months
- 60 Months
- 72 Months
The cumulative option allows investors to receive the principal along with accumulated interest at maturity.
Credit Rating
The NCD issue has been assigned:
- CRISIL AA/Stable
- Brickwork Ratings AA/Stable
A "AA" rating indicates a high degree of safety regarding timely servicing of financial obligations, although it is not free from credit risk.
Investors should remember that credit ratings are opinions on creditworthiness and not guarantees of repayment.
Why is Muthoot Fincorp Raising Funds?
According to the issue documents, the proceeds from the NCD issue are expected to be used for:
- Lending activities
- Financing business growth
- Repayment or prepayment of existing borrowings
- General corporate purposes
Fundraising through NCDs enables the company to diversify its funding sources while supporting future business expansion.
Benefits of Investing in Muthoot Fincorp NCD
Attractive Fixed Returns
The issue offers coupon rates of up to 9.25%, which may be attractive for investors seeking predictable income.
Multiple Interest Payment Options
Investors can choose between:
- Monthly income
- Annual income
- Cumulative wealth creation
depending on their financial goals.
Secured NCDs
The debentures are secured, meaning they are backed by specified assets of the company. In the event of default, secured NCD holders generally have a higher repayment priority than unsecured creditors.
Variety of Investment Tenures
The issue offers multiple maturity options ranging from 2 years to 6 years, allowing investors to select a tenure that aligns with their investment horizon.
Listed on BSE
After allotment, the NCDs are proposed to be listed on the Bombay Stock Exchange, providing liquidity to investors who may wish to exit before maturity. Liquidity, however, depends on market demand.
Risks Investors Should Consider
Credit Risk
Although the issue carries a AA rating, there is always a possibility that the issuer's financial position could change over time.
Interest Rate Risk
If market interest rates rise after investing, the market value of the NCD may decline.
Liquidity Risk
While listed on the BSE, active trading is not guaranteed. Investors may not always find buyers at their preferred price.
Reinvestment Risk
Investors opting for periodic interest payouts may face challenges in reinvesting the interest income at similar rates.
Who Should Consider Investing?
The Muthoot Fincorp NCD may be suitable for investors who:
- Seek regular fixed income
- Prefer debt investments over equity
- Have a medium- to long-term investment horizon
- Understand the risks associated with corporate debt
- Wish to diversify their fixed-income portfolio
It may not be suitable for investors seeking high liquidity or guaranteed returns backed by the Government of India.
NCD vs Fixed Deposit
|
Feature |
NCD |
Fixed Deposit |
|
Issuer |
Company |
Bank/NBFC |
|
Returns |
Fixed Coupon |
Fixed Interest |
|
Tradable |
Yes (if listed) |
No |
|
Credit Risk |
Depends on issuer |
Depends on institution |
|
Liquidity |
Through stock exchange |
Premature withdrawal (subject to terms) |
|
Market Price |
Can fluctuate |
Remains fixed |
How to Apply for the NCD?
Eligible investors can apply through:
- Online trading and investment platforms
- Registered stock brokers
- Banks offering ASBA facility
- Demat accounts
Applications are generally processed on a First Come, First Served basis, subject to the terms of the issue.
Should You Invest?
The Muthoot Fincorp NCD Tranche IV offers relatively attractive coupon rates, multiple payout options, and the security of asset-backed debentures. It may be considered by investors seeking fixed-income opportunities beyond traditional bank deposits.
However, before investing, consider:
- Your risk appetite
- Investment horizon
- Need for liquidity
- Overall portfolio allocation
- The issuer's financial health and credit rating
Investors should read the prospectus carefully and, if required, consult a financial advisor before making an investment decision.
Conclusion
The Muthoot Fincorp NCD Tranche IV (June 2026) issue provides investors with an opportunity to earn fixed returns through secured debt instruments issued by a well-known NBFC. With coupon rates of up to 9.25%, flexible interest payout options, and multiple tenures, the issue may suit investors looking to diversify their fixed-income portfolio.
That said, NCDs carry issuer-specific risks and should not be viewed as risk-free investments. A careful assessment of the company's financial position, credit ratings, and your own investment objectives is essential before investing.
Frequently Asked Questions (FAQs)
1. What is the Muthoot Fincorp NCD Tranche IV issue?
It is a public issue of secured redeemable non-convertible debentures launched by Muthoot Fincorp Limited to raise up to ₹600 crore.
2. What is the interest rate offered?
The issue offers coupon rates of up to 9.25% per annum, depending on the selected series and tenure.
3. What is the minimum investment amount?
The minimum investment is ₹10,000, equivalent to 10 NCDs of ₹1,000 each.
4. Is the NCD secured?
Yes. The issue consists of secured redeemable non-convertible debentures.
5. What is the credit rating of the issue?
The NCD has been rated AA/Stable by CRISIL and Brickwork Ratings.
6. Can investors sell the NCD before maturity?
Yes. The NCDs are proposed to be listed on the BSE, allowing investors to sell them through the stock exchange, subject to market liquidity.
7. Who should invest in this NCD?
The issue may suit investors seeking fixed income, medium- to long-term investment options, and portfolio diversification while understanding the associated credit risks.