Muthoot Microfin has fixed the price band for its upcoming initial public offer (IPO) at Rs 277 – Rs 291 per equity share. The issue will open for public subscription on December 18 and close on December 20. The company plans to raise Rs 960 crore through the public offer.
The floor price of the share is 27.70 times the face value of the equity share while the cap price is 29.10 times.
Investors can make a bid for one lot of 51 shares and in multiples thereafter.
The IPO comprises a fresh issue of Rs 760 crore and an offer-for-sale (OFS) of Rs 200 crore. Under the OFS, promoters Thomas John Muthoot, George Muthoot, Preethi John Muthoot, Remmy Thomas and investor Greater Pacific Capital will offload shares.
In early 2018, the company had filed papers for an IPO and also received the market regulator’s approval. However, it did not go ahead and launch the public offer due to tough market conditions. The company refiled draft papers again in July this year and secured approval in October.
The microfinance firm aims to augment its capital base through the proceeds from the initial public offering. As per the RBI regulations, microfinance institutions are required to maintain a minimum capital adequacy of 15% consisting of tier-I capital and tier-II capital.
As of March 2023 end, the company’s capital adequacy was 21.87%, of which the tier-I capital base was 21.87%.
“Since our company continues to grow its loan portfolio and asset base, it will require additional capital to continue to meet applicable capital adequacy ratios with respect to its business,” Muthoot Microfin said in the draft prospectus.
Muthoot Microfin is the fourth-largest microfinance company in India in terms of gross loan portfolio. It is the third largest in South India, with the largest presence in Kerala in terms of market share. It is also a key player in Tamil Nadu with an almost 16% share.
As of March 2023, its gross loan portfolio stood at Rs 9200 crore, and it had 2.77 million active customers. For FY23, the company reported a revenue of Rs 1430 crore and a profit of Rs 164 crore.
In the six months ended September 2023 period, the company’s revenue increased by 72% year-on-year to Rs 1042 crore, while profit jumped multifold to Rs 205 crore.
ICICI Securities, Axis Capital, JM Financial, and SBI Capital Markets are the book-running lead managers to the issue.
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