Muthoot Finance Faces ₹5.4 Million Tax Demand Amid Strong Q1 Performance and Global Expansion

Muthoot Finance Ltd has received a tax demand of ₹5.4 million, inclusive of interest and penalty, from the Income Tax Department. The notice pertains to procedural discrepancies and is not expected to materially impact the company’s financial health. The development comes shortly after Muthoot reported robust Q1 FY25 results and raised $400 million via ECBs.

 

Key Highlights:

 

The ₹5.4 million tax demand includes interest and penalty, and relates to past assessment periods under review.

 

Muthoot Finance has stated its intent to evaluate legal options and respond appropriately, maintaining compliance with regulatory norms.

 

The company’s Q1 FY25 standalone net profit rose 11 percent YoY to ₹1,079 crore, with loan AUM reaching ₹84,324 crore.

 

Operational Context:

 

Muthoot’s gold loan disbursements hit a quarterly record of ₹73,648 crore, with new customer disbursements also at an all-time high.

 

Subsidiaries contributed 10 percent to consolidated PAT, reflecting diversification into microfinance, home loans, and insurance.

 

The company opened 218 new branches in Q1 and continues to expand its digital footprint.

 

Strategic Outlook:

 

Despite the tax notice, Muthoot remains focused on growth, with ECB proceeds earmarked for onward lending and portfolio expansion.

 

Analysts view the tax demand as a minor regulatory hurdle, unlikely to derail the company’s strong momentum in FY25.

 

Sources: Economic Times, Financial Express, Business Standard, BSE Corporate Filings (July 2025)