Muthoot Microfin IPO subscribed 2.83 times, retail portion bought 4 times on Day 2

The price band for the offer, which will close on December 20, has been fixed at Rs 277-291 per share. The company plans to raise Rs 960 crore from the IPO.

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26 Aug, 2025 12:21

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Muthoot Microfin IPO was subscribed 2.83 times on December 19, with bids coming in for 6.89 crore shares against the issue size of 2.43 crore shares.

Retail investors bought 4.05 times the allotted quota of shares. The portion set aside for non-institutional investors was subscribed 3.11 times, and the employees' portion was booked 2.87 times, while the qualified institutional buyers bid for 46 percent shares of the reserved portion.

The price band for the offer, which will close on December 20, has been fixed at Rs 277-291 per share. The company plans to raise Rs 960 crore from the IPO.

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The offer consists of a fresh issue of 2.61 crore shares worth Rs 760 crore and an offer-for-sale of 0.69 crore shares worth Rs 200 crore by the existing shareholders, including investor Greater Pacific Capital WIV, which will sell off shares worth Rs 50 crore.

The remaining shares worth Rs 150 crore will be sold by promoters Thomas John Muthoot, Thomas Muthoot, Thomas George Muthoot, Preethi John Muthoot, Remmy Thomas, and Nina George.

Several brokerages have assigned the 'subscribe' rating to the issue because of its decent financial performance, rural-focused operations with a robust risk management framework, strong brand recall, and synergies with the Muthoot Pappachan Group.

Also read: Muthoot Microfin IPO: Should you subscribe to the Rs 960-crore issue?

The Kochi-based microfinance institution recorded a 246 percent on-year growth in net profit at Rs 163.9 crore for the year ended March 2023 and revenue during the same period increased by 71.6 percent to Rs 1,428.8 crore.

Its profit after tax for six months 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.

However, there are a few concerns that can’t be ignored. The company derives a significant portion of its revenues from South India. Apart from that, Muthoot Microfin's primary focus on customer segment for micro-loan business is women in rural regions with an annual household income of up to Rs 3 lakh. According to RHP, the customers generally have limited sources of income, savings and credit histories.

Muthoot Microfin’s price-to-earnings (P/E) ratio at 30.3x is cheaper than CreditAccess Grameen (32.4x) and Spandana Sphoorty Financial (551.2x) but more than Equitas Small Finance (20.2x), Ujjivan Small Finance (9.3x), Bandhan (15.6x), Suryoday Small Finance Bank (21.7x) and Fusion Micro Finance (13.5x).