The Muthoot Microfin Limited IPO has been subscribed 11.52 times on December 20, the final day of bidding, with bids for 28.09 crore shares against an issue size of 2.43 crore shares. Retail investors bought 7.61 times and high net-worth individuals (HNIs) picked 13.2 times the allotted quota, while qualified institutional buyers (QIBs) picked 17.47 times the reserved portion.
Muthoot Microfin plans to raise Rs 960 crore through the IPO, which comprises a fresh issue of 2.61 crore shares worth Rs 760 crore and an offer for sale of 0.69 shares worth Rs 200 crore. Shareholder Greater Pacific Capital WIV will sell shares worth Rs 50 crore while the remaining Rs 150 worth of shares will be sold by the company’s promoters-- Thomas John Muthoot, Thomas Muthoot, Thomas George Muthoot, Preeti John Muthoot, Remmy Thomas and Nina George. The price band for the issue had been fixed at Rs 277-291 per share with a lot size of a minimum of 51 equity shares.
The company aims to use the proceeds towards augmenting the capital base to meet its future capital requirements, which are expected to arise out of the growth of Muthoot Microfin's business and assets.
Also read: Muthoot Microfin IPO: 10 things to know before you invest in Rs 960-crore issue
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.
Ahead of the opening of the issue, anchor investors bought Rs 285 crore worth of shares in the microfinance institution.
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.
Also Read: Muthoot Microfin IPO: Should you subscribe to the Rs 960-crore issue?
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).
The NBFC provides micro-loans to women customers with a focus on rural regions of India and is the fifth largest NBFC-MFI (micro-finance institution) in terms of the gross loan portfolio as of March 31, 2023, and the third largest in southern India.
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