Muthoot Fincorp, a Muthoot Pappachan Group company, in the coming weeks, plans to come out with a ₹500-crore non-convertible debenture (NCD) issue (including ₹250-crore greenshoe option) to fund business growth, a top official said.

The fund mobilised would be used for augmenting working capital and to enhance lending, Thomas John Muthoot, Chairman and Managing Director, Muthoot Pappachan Group, told BusinessLine . Muthoot Fincorp provides gold loans and MSME loans. It has a credit rating of ‘A+’ with a stable outlook.

He made it clear that raising non-convertible debentures (NCD) had nothing to do with the economic slowdown.

“In fact, we are doing this at the right time, when domestic financial markets are very active. There is also good demand for gold and MSME loans. As of today, we don’t need equity. We need debt resources,” he said.

Thomas Muthoot also said that Muthoot Fincorp already had board approval for raising debt resources of ₹1,000 crore.

“What we are looking to soon raise will be the first tranche. This will be followed by another tranche in December,” added Muthoot.

He also said that banks have started lending to non-banking finance companies in the second quarter.

“We have renewed lines, and also got additional lines of credit from banks. With the intervention of the Finance Ministry and RBI, things are looking up (for NBFCs),” he said.

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