Muthoot Microfin, which is backed by UK-based private equity investor Greater Pacific Capital, has finalised the opening date as December 18 for its Rs 960-crore initial public offering (IPO). The last date for subscription to the public issue will be December 20. The price band announcement will take place in a couple of days.
The anchor book of the public issue will be opened for a day on December 15.
The IPO comprises a fresh issuance of shares worth Rs 760 crore by the microfinance institution and an offer-for-sale (OFS) of Rs 200 crore worth of shares by existing shareholders.
Promoters, including Thomas John Muthoot, Thomas Muthoot, Thomas George Muthoot, Preethi John Muthoot, Remmy Thomas and Nina George will be offloading Rs 150 crore worth of shares in the OFS, while investor Greater Pacific Capital WIV will sell Rs 50 crore shares in the OFS.
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Promoters, including Muthoot Microfin, hold 69.08 percent shareholding in the company and the remaining 28.53 percent share are owned by public shareholders, including Greater Pacific Capital WIV (19.06 percent stake) and investment management firm Creation Investments India LLC (9.01 percent stake).
Muthoot Microfin has reserved Rs 10 crore worth of shares for its employees, who may be offered these shares at a discount to the final issue price.
The net issue proceeds will be utilised mainly for augmenting its capital base to meet future capital requirements.
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As an NBFC-MFI, the company is required to maintain a minimum CRAR (capital to risk-weighted assets ratio) of 15 percent consisting of Tier I capital and Tier II capital. Its CRAR stood at 21.87 percent (Rs 1,363.8 crore) as of March FY23 and 20.46 percent (Rs 1,540.3 crore) as of September FY24.
"Majority of the borrowers of the company are unsecured and to protect the interests of shareholders of the company, a higher CRAR is required to be maintained," Muthoot Microfin said in the red herring prospectus filed on December 11.
Its AUM (assets under management) grew by 47.22 percent in FY23 and 25.43 percent in FY22. "The growth of the business requires a further infusion of capital and such capital infusion will also lead to improvement in the credit rating which will help the company to receive funds at preferable terms of rate of interest," the company said.
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The Kochi-based microfinance institution has recorded 246 percent on-year growth in net profit at Rs 163.9 crore for the year ended March FY23 and revenue during the same period increased by 71.6 percent to Rs 1,428.8 crore.
Net interest income, the difference between interest earned and interest expenses, surged 79 percent to Rs 879.7 crore compared to the previous fiscal year with net interest margin expansion of 200 bps at 11.6 percent for the year.
Profit after tax for six months period ended September FY24 increased 16.5-fold to Rs 205.2 crore compared to the year-ago period, while net interest income during the same period jumped 65.6 percent to Rs 627 crore with margin expansion of 127 bps at 12.39 percent.
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Meanwhile, Muthoot Microfin will finalise the basis of the allotment of IPO shares by December 21 and will credit equity shares to the demat accounts of eligible investors by December 22.
The company will list its equity shares on the BSE and NSE on December 26, as per the IPO schedule. The markets and banks will remain shut on December 25 for the Christmas holiday.
The book-running lead managers to the issue are ICICI Securities, Axis Capital, JM Financial, and SBI Capital Markets.
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