Muthoot Finance’s Subsidiary Belstar Micro Finance Submitted DRHP With SEBI

Muthoot Finance Limited’s subsidiary, Belstar Microfinance Limited, filed a Draft Red Herring Prospectus (DRHP) with the stock market regulator Securities and Exchange Board of India (SEBI) to raise up to ₹1,300 crore from the public via an Initial Public Offering (IPO). Belstar Microfinance’s IPO is a mix of fresh issue and offer for sale.

Belstar is seeking to raise ₹1,000 crore from the fresh issue component and ₹300 crore from the offer-for-sale portion of the issue. The selling shareholders include MAJ Invest Financial Inclusion Fund II K/S, Arum Holdings Limited and Augusta Investments Zero Pte Ltd.

ICICI Securities Limited, Axis Capital Limited, SBI Capital Markets Limited, and HDFC Bank Limited will be the book-runner lead managers (BRLM) of the Belstar Microfinance IPO.

Purpose of Belstar IPO

Fresh Issue

The company would use the proceeds raised from the fresh issue portion for the following:

• To meet future capital requirements towards onward lending.
• General corporate purposes.

Offer-For Sale

The company will not receive any amounts raised from the offer-for-sale component. All the proceeds will be taken over by the selling shareholder.

Business Overview

Incorporated in 1988, Belstar Microfinance Limited offers a wide range of loan products, such as micro-enterprises, small enterprises, consumer goods, festivals, education, and emergency loans. As of December 31, 2023, it is the 9th largest Non-Banking Finance Company—Micro Finance Institution (NBFC-MFI) in India in terms of assets under management (AUM).

The company’s operations span 279 districts in 19 states and union territories in India, with 1,009 branches and 10,169 employees, who serve approximately 2.67 million customers as of December 31, 2023.

The company’s active customers (excluding active customers from the buyout portfolio) increased from 1.38 million accounts on March 31, 2021, to 2.67 million accounts on December 31, 2023. The company has witnessed growth in its business, operations, and portfolio in the past few years. The company‘s disbursements grew from ₹24,350.27 million in FY 2021 to ₹57,950.85 million in FY 2023.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.