Muthoot Capital Raises Rs 125 Crore Through NCDs

Mumbai, 23 July 2025: Muthoot Capital Services Ltd. has raised Rs 125 crore through private placement of Non Convertible Debentures (NCDs).  The coupon rate on these NCDs is 9.5% per annum.

₹125 Crore NCD Allotment Approved to Secure Long-Term Funding

Muthoot Capital’s Debenture Issue and Allotment Committee approved the issue of 12,500 senior, secured, rated, listed, redeemable, taxable, and transferable NCDs, each with a face value of ₹1,00,000. With a total issue size of ₹125 crore, these NCDs will carry a coupon rate of 9.5% per annum, paid monthly. The tenure is 24 months, starting from 23 July 2025 and ending on 23 July 2027. The debentures are set to be listed on BSE Limited, with the principal repaid in full upon maturity.

NCDs Secured Against Receivables to Enhance Investor Confidence

To ensure repayment security, the company has backed the NCDs with a first-ranking pari-passu charge on its entire receivables, including the loan book and current assets. These assets must maintain a minimum cover of 1.10 times the outstanding debenture value, as per the hypothecation agreement. This structure assures investors of adequate backing while reinforcing the company’s commitment to financial transparency.

Strong Compliance Record Supports Trust in Debt Issuance

Muthoot Capital reported no payment delays or defaults in its previous debenture obligations. Additionally, the company has made no alterations to the privileges or rights associated with these instruments, underlining a consistent and stable debt servicing track record.

Revenue Jumps by 43%, But Net Profit Drops Sharply in Latest Quarter

In its March 2025 quarter, Muthoot Capital Services Ltd. recorded a revenue of ₹140 crore-representing a robust 43% year-on-year growth. However, despite rising top-line performance, the net profit declined to ₹6 crore, marking a 45% drop year-on-year. While operating profit reached ₹73.5 crore with a margin of 53.51%, interest expenses also rose to ₹67.6 crore, significantly squeezing bottom-line profitability.

Financial Trajectory Over 13 Quarters Reveals Growth Amid Volatility

The company has demonstrated consistent revenue growth over the past three quarters, increasing from ₹98.2 crore in March 2024 to ₹140.4 crore in March 2025. Operating profits, too, have seen a rise from ₹57.3 crore to ₹73.5 crore over the same period. However, higher interest and depreciation costs have placed pressure on net profit figures, making profitability unpredictable.

Key Metrics Reflect Mixed Performance Compared to Industry Standards

Muthoot Capital’s market capitalisation stands at ₹575.7 crore-among the higher valuations in its industry. However, several financial indicators reflect areas of concern:

• Price-to-Earnings (PE) Ratio (TTM): At 12.6, this is below the industry median, indicating undervaluation or slower earnings growth.
• Price-to-Book Ratio: At 0.9, the figure remains below industry median, pointing to conservative market sentiment.
• Net Profit Growth (YoY): Down by 45%, indicating weakening profitability.
• Return on Equity (ROE): 7%, below the sector median, showing lower shareholder returns.
• Return on Assets (RoA): 1.3%, suggesting lower asset efficiency.

Despite these challenges, the company posted a quarterly revenue growth of 40.2%, which is above the industry median, along with a trailing twelve-month (TTM) operating profit margin of 60.2%, indicating operational resilience. However, the Piotroski score of 4 signals weak overall financial health.

About the Company: Focused on Two-Wheeler and Consumer Durable Financing

Muthoot Capital Services Ltd., part of the Muthoot Pappachan Group, is a listed non-banking financial company (NBFC) headquartered in Kochi. The firm primarily focuses on financing two-wheelers and consumer durables. It is listed on both the BSE and NSE under the symbol MUTHOOTCAP and actively taps the debt market for private placements to diversify its funding sources.

Muthoot Capital’s latest NCD allotment signals its ongoing intent to raise stable capital amid fluctuating profit margins and rising interest costs. While revenue growth remains strong, the company’s ability to enhance profitability and manage its financial leverage will be critical in sustaining investor confidence going forward.

REF:https://nsearchives.nseindia.com/corporate/MUTHOOTCAPS_23072025125146_Allotment.pdf

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