Muthoot Finance Raises $400 Million Through ECBs

Muthoot Finance Ltd, one of India’s top gold loan providers, has pulled in $400 million (around Rs.3,350 crore) through Senior Secured Notes as part of its $2 billion Global Medium Term Note Program. This follows the guidelines set by the Reserve Bank of India (RBI) for External Commercial Borrowings (ECB).

Deal Breakdown 

The Notes carry a 6.375% annual coupon and will mature in 4.5 years, with an average duration of four years. Investor interest was massive, with the offering oversubscribed by 3.9 times, pushing the order book beyond $1.3 billion. Over 125 global investors took part in the issuance, showing just how much faith international markets have in Muthoot Finance.

The funds raised will be used for onward lending and other permissible activities under ECB rules, the company said in its filing. The Notes have also been listed on the NSE IX in Gift City, Gujarat.

Growing Partnership with Global Investors

This isn’t Muthoot Finance’s first foray into international funding. The company raised $450 million in 2019 and $550 million in 2020, both repaid on time. They’ve already raised $750 million earlier this year at a coupon of 7.125%. What stands out this time is the lower coupon rate of 6.375%, reflecting the great response from global investors and Muthoot’s financial performance.

What This Means for Muthoot

Muthoot Finance is no small player, with over 4,800 branches serving more than 250,000 customers daily. As of March 31, 2024, the company held loan assets worth Rs.75,827 crore and posted a net profit of Rs.4,050 crore for FY24.

Currently, Muthoot Finance’s stock is trading at Rs.1,928, up an impressive 31.52% year-to-date and 50.54% over the past year. The company continues to generate positive attention, both from investors and the stock market.

Conclusion: In conclusion, this $400 million will help strengthen Muthoot Finance’s lending capacity and expand its global investor base. With a record of timely repayments and good performance, the company seems set to solidify its leadership in the gold loan market, both at home and abroad.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.