Motilal Oswal Greenlights ₹5 Billion NCD Issue to Bolster Capital Base

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Motilal Oswal Financial Services Ltd. (MOFSL) has approved the issuance of non-convertible debentures (NCDs) aggregating to ₹5 billion, marking a strategic move to strengthen its funding base and support future growth initiatives. The announcement comes amid rising investor interest in fixed-income instruments and signals the company’s intent to diversify its capital structure while maintaining robust credit ratings.

Key Highlights from the Announcement

MOFSL will issue secured, redeemable, listed NCDs worth ₹5 billion
The NCDs are rated CRISIL AA/Stable and IND AA/Stable, indicating high credit quality
Tenure options range from 24 to 120 months, catering to varied investor preferences
Effective annual yields go up to 9.70%, making it attractive for income-focused investors

Structure and Terms of the NCDs

Issue Size and Allocation

Base issue size: ₹5 billion
Option to retain oversubscription up to ₹5 billion, taking the total to ₹10 billion
Minimum investment: ₹10,000 (10 NCDs of ₹1,000 each)
Allotment on a first-come, first-served basis

Interest Rates and Tenure

Series I: 24 months, annual coupon of 8.85%
Series III: 36 months, annual coupon of 9.10%
Series VI: 60 months, annual coupon of 9.35%
Series VIII: 120 months, annual coupon of 9.70%
Monthly and annual payout options available across series

Listing and Trading

NCDs will be listed on BSE and NSE
Trading in dematerialized form only
Debenture Trustee: Beacon Trusteeship Limited

Utilization of Proceeds

At least 75% of the net proceeds will be used for working capital and repayment of existing liabilities
Up to 25% earmarked for general corporate purposes
The company has confirmed full utilization of previous NCD proceeds with no deviations

Strategic Context and Market Position

MOFSL is one of India’s largest full-service brokers, with the highest gross brokerage revenue as of FY23
The company offers a diversified suite of services including broking, wealth management, asset management, and housing finance
With over 7,900 employees and a pan-India presence, MOFSL continues to expand its footprint across retail and institutional segments

Recent Developments and Governance

India Ratings revised MOFSL’s credit outlook from Stable to Positive in September 2024
The company received SEBI’s administrative warning in June 2024 for minor operational matters
Promoters Motilal Oswal and Raamdeo Agarawal pledged to donate 10% of the company’s equity for charitable causes
Re-appointment of Mr. Motilal Oswal as MD & CEO effective January 2026 and Mr. Rajat Rajgarhia as Whole-time Director from July 2025

Investor Takeaways

The NCDs offer competitive yields with strong credit ratings, making them suitable for conservative investors
MOFSL’s consistent dividend history and stable promoter holding enhance investor confidence
The diversified tenure options provide flexibility for both short-term and long-term investment horizons

Outlook

Motilal Oswal’s latest NCD issuance reflects its proactive approach to capital management and investor engagement. With a strong brand, diversified business model, and prudent financial practices, the company is well-positioned to navigate market cycles and deliver consistent returns. The move also aligns with broader trends in India’s debt market, where high-quality issuers are attracting increased retail participation.

Source: Motilal Oswal Financial Services Ltd. Investor Relations