9.25% Muthoot Fincorp NCD Tranche IV: Check credit rating, interest rate, tenure and other details

Muthoot Fincorp NCD Tranche IV opened for retail subscription on June 19 and will close on July 3, 2026. A non-convertible debenture (NCD) is a fixed-income instrument through which companies raise long-term funds, while investors receive the principal amount along with interest as per the terms of the issue.

These NCDs carry a fixed tenure as well as a fixed rate of interest.

Here we discuss the key features of Muthoot Fincorp NCD Tranche IV.

NCD details: The secured and redeemable NCD is offered under 12 options with tenures of 2, 3, 5 and 6 years.

The issue has a base size of ₹200 crore and is being offered at a face value of ₹1,000 per NCD. The company also has the option to retain oversubscription of up to ₹400 crore, taking the total issue size to ₹600 crore.

The NCDs will be listed on the BSE.

Objective of the issue

As per the NCD prospectus, the net proceeds of the Tranche IV issue are intended to be utilised by the company for the following purposes:

At least 75% of the proceeds will be used for onward lending, financing, and repayment/prepayment of interest and principal of existing borrowings of the company.

The remaining up to 25% will be used for general corporate purposes.

Minimum application: Investors can invest in the NCD for a minimum of ₹10,000.

Credit rating: The NCD issue is rated Crisil AA/ Stable by Crisil Ratings. Securities with this rating are considered highly safe with regard to timely servicing of the financial obligation. Brickwork has rated the issue as BWR AA/Stable. Both of these ratings specify that the offer carries very low credit risk.

Coupon rate and yield:

So, investors can get a highest yield of 9.25% per annum for a tenure of 6 years under Option XII with the cumulative interest payment option.

How is interest from NCDs taxed?

The interest income earned on NCDs is classified as ‘Income from other sources’ and is added to an investor’s total taxable income. It is taxed according to the applicable income-tax slab rate. Further, if the NCD is listed on a stock exchange, the issuer will generally not deduct tax deducted at source (TDS) on the interest income.