Muthoot Microfin plans Rs 1,800 crore IPO by 2023

Delhi-based Muthoot Microfin, with a client base of 2.2 million across 18 states and served by its 1,008 branches is planning to tap the capital markets with an IPO of Rs 1,500-1,800 crore by the last quarter of 2023.

PTIUpdated: Wednesday, November 09, 2022, 02:03 PM IST
article-image
Muthoot Microfin plans Rs 1,800 crore IPO by 2023 | Muthoot Microfin

Muthoot Microfin, the microfinance arm of the Muthoot Pappachan Group, is planning to tap the capital markets with an initial share sale offer of Rs 1,500-1,800 crore by the last quarter of 2023.

Delhi-based Muthoot Microfin is promoted by Muthoot Fincorp, which is the third-largest gold loan player and the flagship firm of Muthoot Pappachan Group.

This is the third largest MFI with a client base of 2.2 million across 18 states and served by its 1,008 branches. As of September 2022, the company had an active loan book of Rs 7,500 crore.

"We are planning a Rs 1,500-1,800-crore IPO by the fourth quarter of 2023 and expected to file the IPO papers with the Sebi by May 2023," Thomas Muthoot, managing director of Muthoot Microfin, told PTI on Wednesday from Kochi.

"At Rs 1,500-1,800 crore, our IPO will be the largest from the MFI segment, Muthoot said, adding that Muthoot Microfin will also be the first MFI to cross the Rs 10,000-crore AUM mark by the time of listing."

"Muthoot Fincorp and the Muthoot family own a 71 per cent stake in Muthoot Microfin. Besides, London-based private equity firm GPC holds 16.6 per cent and Chicago-based private equity fund Creation owns 9.3 per cent," he added.

The company is planning to raise Rs 1,200 crore of primary capital, and there can be a small offer for sale by the external investors, but none of them has indicated that they want to exit the company, Sadaf Sayeed, the chief executive of Muthoot Microfin, told PTI from New Delhi.

However, the final size of the OFS would be decided closer to the issue date and so is the valuation. But I can say that we are likely to be trading at Rs 7,000-7,500 crore post-listing, he added.

On the DRHP filing, Sayeed said they expect to seek Sebi approval by May-end, once the financial books are closed for FY23.

Muthoot Microfin growth

The company has been growing well and the loan book crossed the Rs 7,500-crore AUM mark in September, from which it earned revenue of Rs 614.9 crore in H1 FY23, up 66 per cent from Rs 369.4 crore in H1 FY22 and its net income rose from Rs 1.23 crore in H1 FY22 to Rs 27.3 crore in H1 FY23, he noted.

The management said the company is fully recovered from the pandemic disruptions and has since been showing sustainable and profitable operations.

We are on a growth path now, registering over 45 per cent compounded growth rate, and our AUM has already crossed Rs 7,500 crore, up from Rs 6,300 in March 2022, Sayeed said.

He also said the asset quality has also improved significantly, and the post-pandemic loans are contributing just 0.10 per cent of the NPAs, and as of September, 87 per cent of the loan book represents post-pandemic origination.

As of September, overall asset quality has improved, with gross NPAs halving to 3.3 per cent from 6.3 per cent and net NPAs falling to 0.88 per cent from 1.5 per cent in March 2022, he added.

Muthoot said the promoter family will continue to hold more than 50 per cent of the company post-issue.

(To receive our E-paper on whatsapp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

RECENT STORIES

Elon Musk: Twitter may exceed 1 billion users in 12-18 months

Elon Musk: Twitter may exceed 1 billion users in 12-18 months

India now has 2nd largest gamer base in the world with over 396 million gamers

India now has 2nd largest gamer base in the world with over 396 million gamers

Winter product trends pickup, FMCG makers hopeful of rural growth in coming quarter

Winter product trends pickup, FMCG makers hopeful of rural growth in coming quarter

Cumulative recovery rate under insolvency resolution falls to 30.18% in September Quarter: Report

Cumulative recovery rate under insolvency resolution falls to 30.18% in September Quarter: Report

Godrej Properties hopes to launch Rs 8,000-cr luxury housing project in Delhi by March

Godrej Properties hopes to launch Rs 8,000-cr luxury housing project in Delhi by March