Muthoot Finance to raise up to USD 2 bn from foreign markets to fund biz growth

Gold loan financier Muthoot Finance Ltd on Thursday said it proposes to raise USD 2 billion (around Rs 14,200 crore) from foreign market to fund its business growth.

The board of the company approved the establishment of a Global Medium Term Note Programme for raising up to USD 2 billion through issuance of foreign currency bonds or rupee denominated bonds overseas on public/private basis in international markets subject to market conditions and regulatory approvals, Muthoot Finance said in a statement.

The establishment of the Global Medium Term Programme is only an enabling step and presently, no instruments are being issued by the company.

Appropriate intimations will be made to stock exchanges as and when the company issues any instruments under the Global Medium Term Note Programme, it said.

In another development, the company said it has been assigned long term rating of 'BB+' with a 'stable' outlook by Fitch Ratings.

Besides, S&P Global Ratings has assigned a long term rating of 'BB' with 'stable' outlook. Moody's Investor Service has assigned 'Ba2' Corporate Family Rating with 'stable' outlook, it said in a release.

These ratings will enable Muthoot Finance to access international debt market.

"The ratings take into account Muthoot Finance's well-established franchise in the niche segment of gold-backed financing, its low credit losses and satisfactory leverage," Fitch Ratings stated.

S&P Global Ratings said, "The ratings on Muthoot Finance are driven by the company's very strong capital and earnings, with the risk-adjusted capital ratio at above 45 per cent.

Moody's Investor Service said the rating takes into account the company's leading franchise and well established track record in lending against the gold jewellery segment in India, and strong solvency metrics, including asset quality, capital and profitability.