Muthoot Microfin files DRHP with SEBI for Rs 1,350 Cr IPO; Details inside

Muthoot Microfin has submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) in order to initiate its initial public offering (IPO). The company plans to raise Rs 1,350 crore through the sale of its initial stake. In 2018, the company had previously submitted draft documents.

The proposed IPO comprises a fresh issue of equity shares for raising Rs 950 crore and an offer for sale aggregating up to Rs 400 crore.

Muthoot Microfin, a subsidiary of the Muthoot Pappachan Group, operates as a microfinance institution. It specializes in offering micro-loans to women customers, with a particular emphasis on serving rural areas in India.

According to the draft red herring prospectus, It may carry out a pre-IPO placement to raise Rs 190 crores. If this placement takes place, it will result in a reduction in the size of the fresh issue of equity shares.

The funds raised from the issuance of new shares will be utilised to strengthen the company’s capital base in order to meet future capital needs.

Several entities have expressed their intention to sell shares worth Rs 400 crore through the Offer for Sale method. Greater Pacific Capital WIV Ltd plans to divest equities valued at a maximum of Rs 100 crore, while Thomas John Muthoot, Thomas Muthoot, and Thomas George Muthoot seek to sell shares up to Rs 70 crore each.

Furthermore, as mentioned in the DRHP, Preethi John Muthoot, Remmy Thomas, and Nina George also intend to sell shares with a total value of up to Rs 30 crore each.

Some Key Financials and Operational Metrics:

It holds the position of being the fourth largest non-banking financial company-microfinance institution (NBFC-MFI) in India in terms of its gross loan portfolio according to a report by Crisil. Among NBFC-MFIs in South India, it ranks as the third largest in terms of gross loan portfolio. Furthermore, it holds the top spot in Kerala in terms of market share in the microfinance institution sector. Also, it has a significant market share of nearly 16% in Tamil Nadu, as of December 31, 2022.

ICICI Securities, Axis Capital, JM Financial, and SBI Capital Markets have been appointed as the book-running lead managers for the proposed issue. They will play a crucial role in managing various aspects of the offering, including underwriting, pricing, and marketing of the securities.