Sadaf Sayeed, chief executive of Muthoot Microfin, said the idea is to diversify funding sources and that the company plans to raise Rs500-600 crore this financial year through MLDs.
“These funds will be utilised for disbursements to microfinance clients. We are expecting a rebound in the rural economy post the pandemic woes and we are well-equipped to service the sector with ample fund, operational reach, and adequate resources. We also plan to close our $50 million equity fundraising very soon," said Sayeed.
The principal-protected market-linked debentures (PP-MLD) are listed on the BSE and rated A/stable by Crisil.
According to Muthoot Microfin’s chief financial officer Praveen T, the lender is quite comfortable with the liquidity position and is expanding sources of funds beyond traditional venues like term loans or direct assignments.
“We have issued several non-convertible debentures (NCDs) in the past; with MLDs, we were able to raise funds at very competitive rates. Current MLD is listed at 10.25% and going forward we expect this cost to go down by 50 – 75 basis points (bps)," said Praveen.
Muthoot Microfin is present in 17 states with a network of 773 branches and has around 1.8 million active borrowers. The company’s average loan ticket size is around ₹30,000.