Muthoot Capital Surges 6% as Board Approves ₹125 Cr NCD Issue to Fuel Growth

10 July 2025 – Muthoot Capital Services Ltd (NSE: MUTHOOTCAP) stock jumped as high as 5.6%, to an intraday high of ₹354.85 on Thursday. As of 1:12 PM IST on July 10, Muthoot Capital Services was trading at ₹352.20, up ₹15.15 or 4.49% for the day, significantly outperforming the benchmark BSE Sensex, which fell 0.42% to 83,187.48.

The rally came after the board of the company sanctioned raising ₹125 crore by issuing secured Non-Convertible Debentures (NCDs) on a private placement basis with a 9.5% coupon rate, offering good monthly returns.

Muthoot Capital has already subscribed for ₹100 crore worth of NCDs, each secured by first-ranking security over receivables and yielding 10.35% per annum, highlighting conservative capital management and investor-friendly features.

NCD Issue Details

Muthoot Capital is to issue 12,500 NCDs with face value of ₹1 lakh each aggregating up to ₹125 crore. The NCDs have a term of 24 months with a coupon rate of 9.5% per annum on an annual basis and monthly payment of interest.

This is the company’s second NCD issue in the last couple of months. Muthoot Capital had issued ₹100 crore NCDs with a term of 21 months in June 2025, which carried a coupon rate of 10.35% and had a monthly interest and quarterly principal repayment structure.

NCD initiative highlights Muthoot Capital’s strategic emphasis on secured income-yielding debt to drive expansion, and recent price appreciation of the stock (despite general market weakness) indicates improving investor confidence in its prudent funding strategy and value-driven valuation.

What are NCDs?

Non-Convertible Debentures are fixed-income instruments used by companies to raise capital. Unlike convertible debentures, NCDs cannot be converted into equity shares. They offer fixed interest returns and can be either secured or unsecured. While they generally provide higher returns than bank fixed deposits, they carry credit and liquidity risks, and returns are taxed as per the investor’s income bracket.

Company Overview

Muthoot Capital Services Ltd., part of the Muthoot Pappachan Group, is a Reserve Bank of India-registered Non-Banking Financial Company (NBFC). It provides retail financing solutions including two-wheeler and used car loans, and also offers investment products such as fixed deposits.

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