Muthoot Microfin files draft papers for Rs 1,350 crore IPO with Sebi

Muthoot Microfin has filed its draft red herring prospectus (DRHP) with the capital markets regulator Sebi to launch its initial public offering (IPO). The company intends to mop-up Rs 1,350 crore through its initial stake sale. Prior to this, the company has already submitted draft documents in 2018.

Muthoot Microfin is the microfinance institution of Muthoot Group providing micro-loans to women customers with a focus on rural regions of India. It is likely to raise Rs 950 crore via issue of fresh equity shares, while existing promoters and shareholders are likely to offload shares worth Rs 400 crore via OFS route.

Promoters including Thomas John Muthoot, Thomas Muthoot, Thomas George Muthoot, Preethi John Muthoot, Remmy George and Nina George along with selling shareholders Greater Pacific Capital WIV are participating in the offer-for-sale (OFS).

According to the DRHP of Muthoot Microfin, the company may also conduct a pre-IPO placement to raise Rs 190 crores. If this placement is undertaken, the size of the fresh issue will be reduced. However, the net proceeds from the fresh issue shall be utilized to strengthen its capital base in order to meet future capital needs.

Muthoot Microfin Limited is the fourth largest NBFC-MFI in India in terms of gross loan portfolio; the third largest amongst NBFC-MFIs in South India in terms of gross loan portfolio; and the largest in Kerala in terms of MFI market share, and a key player in Tamil Nadu with an almost 16 per cent market share, as of December 31, 2022, according to a Crisil report.

The company has reserved 50 per cent of the offer to qualified institutional bidders (QIBs), while 15 per cent of shares shall be allocated for non-institutional investors (NIIs). Retail investors will get the remaining 35 per cent of the equity shares.

ICICI Securities, Axis Capital, JM Financial and SBI Capital Markets are the book running lead managers (BRLMs) to the issue, while KFin Technologies has been appointed as the registrar to the issue. Shares of Muthoot Microfin are likely to be listed at both BSE and NSE.

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