Muthoot Finance has raised US$600 million through an external commercial borrowing issuance in the international bond market.

The funds will be used to support lending operations across India.

The issuance, part of its US$2 billion global medium-term note programme, was priced at 6.4% with a 4.5-year tenor and a weighted average life of 4 years.

Investor demand came from Asia (36%), EMEA (15%), and the US (49%), with fund and asset managers accounting for most of the subscription.

This is Muthoot Finance’s first bond issue after rating upgrades earlier this year.

Deutsche Bank and Standard Chartered acted as joint global coordinators and bookrunners.

Rating upgrades strategically positioned Muthoot for international fundraising success
• Muthoot’s $600 million bond issuance came directly after consecutive rating upgrades from major agencies. S&P upgraded them in March 2025 and Moody’s in April 2025, followed by Fitch’s upgrade from BB to BB+ in August 2025.
• This timing appears deliberate, as the company specifically noted this was their “first issuance following rating upgrades” in their announcement, suggesting they waited for improved ratings before accessing international markets.
• The strategy worked—despite the relatively modest BB+/Ba1 rating levels, the bond attracted strong global demand with 91% subscription from fund and asset managers across three continents.
• The 6.375% pricing demonstrates how even incremental rating improvements can meaningfully reduce borrowing costs for emerging market financial institutions seeking international capital

Gold loan NBFCs demonstrate resilient funding diversification amid rapid growth
• Muthoot’s international fundraising success reflects the underlying strength of India’s gold loan sector, with the company reporting 25% year-over-year growth in assets under management to ₹89,079 crore in fiscal 2024.
• The $2 billion raised through five international bond issuances since May 2024 shows how specialized NBFCs can successfully diversify funding sources beyond domestic markets when backed by consistent performance.
• This international access becomes particularly valuable given Muthoot’s aggressive expansion—the company maintains over 4,422 branches serving 8.05 million loan accounts, requiring substantial capital to fund continued lending growth.

Reference URL: https://www.techinasia.com/news/indian-firm-muthoot-finance-raises-600m-via-digital-bond-sale