Muthoot Mercantile Ltd NCD

Muthoot Mercantile Ltd. NCD is a secured, redeemable, non‑convertible debenture issue offering high coupon rates of 10.75% p.a. across multiple tenors, rated IND BBB/Stable by India Ratings & Research. It targets investors seeking higher fixed-income returns with moderate credit risk, backed by a gold-loan-focused NBFC balance sheet that has shown rising assets and profits over the last three years. ​

Issue Highlights :-

• Open Date :- 4^th Dec 2025 , Closing Date :- 17^th Dec 2025
• Instrument type: Secured, redeemable, non‑convertible debentures (Secured NCDs).
• Issue size: Base ₹75 crore with a green-shoe option of ₹75 crore, aggregating up to ₹150 crore in the latest December 2025 public issue.
• Issue price & face value: ₹1,000 per NCD; minimum application 10 NCDs (₹10,000), market lot 1 NCD thereafter.
• Tenors: 400 days, 24 months, 36 months, 60 months, and 75 months, depending on series. ​
• Coupon range: Around 9.50%–10.75% p.a. across cumulative and interest‑payout options; effective yields go up to about 11.73% p.a. for the longest cumulative series.
• Rating: IND BBB/Stable (moderate degree of safety) from India Ratings & Research.
• Security: First ranking pari passu charge on specified movable assets, including book debts, receivables, loans, advances, cash and bank balances, to the extent of 1x of NCD outstanding plus interest.
• Allotment ratio: Institutional 10%, non‑institutional 40%, retail 50% as per recent tranche allocations. ​

Company snapshot

Muthoot Mercantile Ltd. is an NBFC primarily engaged in gold loans and related lending activities, part of the wider Muthoot brand ecosystem but a separate entity from listed Muthoot Finance. Financials (₹ crore) show assets rising from 606.51 (FY23) to 990.80 (FY25), revenue from 94.67 to 166.43, and PAT from 18.19 to 28.09 over FY23–FY25, indicating scale‑up with stable profitability.

Company Financials :-

Muthoot Mercantile Ltd. Financial Information (Restated)

Muthoot Mercantile Ltd.'s revenue increased by 26% and profit after tax (PAT) rose by 16% between the financial year ending with March 31, 2025 and March 31, 2024.

Objective of the Issue

The Company proposes to utilise the funds which are being raised through the Issue, after deducting the Issue-related expenses to the extent payable by the company towards funding the following objects:

1. For onward lending, financing and repayment/prepayment of principal and interest on existing borrowings; and
2. General Corporate Purposes

Key strengths

• Secured NCD structure backed by charge on receivables and other movable assets.
• Attractive coupon range (about 9.50%–10.75% p.a.) with effective yields up to ~11.73%.
• Diversified tenors (400 days to 75 months) and payout options (annual/cumulative).
• Growing asset base and steady rise in revenue and PAT over FY23–FY25.
• Part of a long‑established Muthoot group franchise in gold‑backed lending.
• Category allocation favouring retail (around 50% of issue).

Key risks

• IND BBB/Stable rating indicates moderate safety, below top‑tier AA/AAA brackets.
• Business concentration in gold loans and secured retail lending; sensitive to gold price volatility and regulatory norms.
• Higher yield reflects higher perceived credit risk versus top PSU/AAA issuers.​
• Interest rate and reinvestment risk for longer‑tenor series (60–75 months).
• Liquidity risk if secondary market trading volumes are thin. ​
• NBFC sector exposure to funding‑cost spikes and economic slowdowns.

FAQs – Muthoot Mercantile Ltd. NCD

Q1. What are the key dates and size of the latest Muthoot Mercantile NCD issue?
Recent public issues have opened in 2025 (March and December tranches); the December 2025 tranche has a base size of ₹75 crore with a green‑shoe of ₹75 crore, totalling up to ₹150 crore.

Q2. What is the minimum investment?
The face value and issue price are ₹1,000 per NCD; minimum application is 10 NCDs (₹10,000), with additional in multiples of 1 NCD.

Q3. What interest rates and tenors are offered?
Series carry tenors such as 400 days, 24/36/60/75 months with coupon rates roughly between 9.50% and 10.75% p.a., and effective yields up to around 11.73% depending on series and payout frequency.

Q4. Is the NCD secured and what is the rating?
Yes, these are secured NCDs with a charge on identified movable assets; the rating is IND BBB/Stable from India Ratings & Research, indicating moderate degree of safety.

Q5. How is the issue allocated among investors?
The allocation ratio in the latest issue earmarks about 10% to institutional, 40% to non‑institutional, and 50% to retail investors. ​

Q6. Are the interest payments taxable?
Yes, interest from NCDs is fully taxable at the investor’s slab rate and subject to TDS as applicable; there is no special tax‑free status.

Q7. Who should consider investing in this NCD?
Investors with moderate risk appetite seeking higher fixed-income yields than bank FDs, comfortable with NBFC credit risk and a BBB rating, and aligned with the chosen tenor.

(For detailed suitability, consult a financial advisor or an intermediary like JM Financial Services that can position this NCD within an overall debt allocation, alongside mutual funds, tax‑free bonds, and other fixed‑income products.)