Q4 Jolt, Billion-Rupee Bet: Muthoot Microfin’s High-Stakes NCD Move Sparks Investor Curiosity

Muthoot Microfin Ltd has come out with a tough March quarter, reporting a net loss even as revenues have been steady, and has acted fast to shore up its financials by sanctioning a significant non-convertible debenture (NCD) issue of ₹15 billion.

 

Major Points:

 

Q4 Financial Performance:

For Q-Mar 2025, total revenue from operations stood at ₹5.55 billion for Muthoot Microfin. Despite this, the company registered a huge net loss of ₹4.01 billion, a drastic turnaround from earlier quarters when profits were increasing consistently. The loss is due to increased provisions, elevated operating expenses, and asset quality pressures evident through increased GNPA and NNPA levels.

 

Resource Mobilization through NCDs:

To meet the tough quarter, the Board has sanctioned raising a total of ₹15 billion through issue of non-convertible debentures. The capital injection will be for funding diversification, liquidity support, and facilitating ongoing lending to microfinance customers. The step comes after recent highly successful NCD issuances to international influence investors such as Triple Jump, and further talks are also on for further financing.

 

Operational and Strategic Updates

Even after the loss, Muthoot Microfin has a sound capital adequacy ratio of more than 30% and strong liquidity buffers. The company is further digitalizing its disbursement and collection functions, with 100% digital disbursements and a quarter of collections being digital. Assets under management (AUM) have increased year-on-year, and the company is also concentrating on enhancing asset quality and operational efficiency.

 

Market Outlook:

Management is optimistic that the NCD problem and consistent digital growth will stabilize performance, return profitability, and set Muthoot Microfin up for sustained growth in the quarters ahead.

 

Muthoot Microfin's bold fundraising action indicates resilience and proactive measures to navigate near-term headwinds.

 

Source: Moneycontrol, Economic Times, Muthoot Microfin Official