High Yield | BBB/Stable Rated | Minimum Investment: 10k Only

Muthoot Mercantile Limited is issuing the Non-Convertible Debentures. These NCDs are BBB/Stable rated by India Ratings and Research. The NCDs are being issued in nine series: coupon ranges from 9.5% to 10.75% p.a. and different tenures of 400 days, 24 months, 36 months, 60 months and 75 months. The NCDs are senior secured and redeemable in nature. 

Muthoot Mercantile Limited NCD IPO: Coupon rates and effective yield for each of the series

Allocation Ratio

The allocation ratio is prepared based on norms laid down by SEBI. Before announcing the allocation ratio, the same has to be approved by SEBI.  Once the IPO subscription closes, applications will be divided into different categories. The category-wise allocation ratio is always decided and declared during the launch of the particular IPO. Considering the Allocation Ratio, units will be assigned to applicants. Refer to the chart to know the application ratio for Muthoot Mercantile Limited NCD-IPO.

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Financial Overview

Snapshot stating the Total Income, Expenses, PAT and Net Worth  ( Amount In Rs. Cr)

Cash flow for last few years ( Amount In  Rs. Cr)

Cash flow refers to the movement of cash in and out of the business at a specific point in time. It represents the net balance of the cash movement.

• • *Cash flow from operating activities reflects the amount a company generates through its product of services.
  • **Cash flow from investing activities reflects cash generated and spent relating to investing activities, like purchase of assets, sales of securities etc.
  • ***Cash flow from financing activities gives an insight into the financial stability of a company to its investors. It reflects the net flows of cash that are used to fund the company.

Ratio Analysis

Issue analysis

Pros 

• The NCD is BBB rated security with a stable outlook.
• The coupon rate is between 9.50% to 10.75% which is much higher than FDs.

Cons 

• High Gold Loan Concentration – Vulnerable to gold price volatility and regulatory changes in gold financing.
• Limited Lender Diversification – Relies on only five major lenders, increasing refinancing risk.

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About Muthoot Mercantile Limited 

Muthoot Mercantile Limited (MML) was established as a Public Limited Company in 1997 and obtained registration as a Non-Banking Finance Company from the Reserve Bank of India in 2002. As a prominent NBFC, Muthoot Mercantile Limited serves as the flagship entity of the Muthoot Ninan Group, founded by the late M. Ninan Muthoot in 1939. The company specializes in providing loans secured against gold.

Strengths

• • Experienced Promoters : Backed by the Muthoot Ninan Group with deep expertise in gold loans; promoter Mathew Mathaininan brings 60+ years of financial services experience, and MD Richi Mathew brings 20+ years.
  • Long Track Record in Gold Lending: MML has over 20 years operating in the gold loan business, with demonstrated ability to navigate gold price cycles while maintaining stable asset quality.
  • Robust Capital Base: Muthoot Mercantile Limited (MML) reported a strong capital adequacy ratio (CAR) of 25.4% in FY25, significantly higher than regulatory mandates, ensuring a solid risk cushion.
  • Stable Profitability: Despite a dip in net interest margin (NIM) to 10% (FY24: 11.2%) due to higher funding costs (11.4% vs. 10.7%), MML posted a PAT of ₹28 Crore in FY25, with an RoA of 3.14%.
  • Adequate Liquidity: No negative mismatches in the up-to-one-year ALM buckets (Sep’25), supported by short-tenor assets (~9 months) and longer-tenor liabilities (3–5 years).

Weakness

• • High Funding Concentration Risk: MML’s funding structure remains heavily reliant on a limited number of sources. Bank borrowings declined to 30% of total funding in FY25 (vs. 35.4% in FY24 and 47.4% in FY23), while non-convertible debentures (NCDs) gained a larger share. Notably, the company depends on just five lenders, increasing refinancing risks.
  • Exposure to Gold-Linked Risks: Nearly 99.5% of MML’s AUM is tied to gold loans, making it vulnerable to fluctuations in gold prices and potential regulatory shifts in gold financing policies.
  • Geographical concentration risk: Despite pan-India presence, ~60.4% of the loan book is concentrated in three states- Kerala, Odisha & Maharashtra – exposing the portfolio to localized policy, socio-political & natural disruption risks.
  • Commodity & Regulatory Vulnerabilities: The heavy dependence on gold loans exposes MML to commodity price volatility and changes in gold lending regulations, which could impact profitability and asset quality.

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Source – Prospectus December 01, 2025 

Disclaimer – The information is published as on date 15/12/2025 based on information available on Prospectus December 01, 2025. The information may be subject to change in case of change in terms of prospectus or any other reason as the case maybe. Contents which are exclusively for educational information/knowledge sharing on capital market concepts and has no influence the investment/sale decisions of any investors