Muthoot Microfin IPO: Price Band Fixed at Rs 277-291

Mumbai, Dec 13 (PTI) Muthoot Microfin, the microlending arm of the Muthoot Pappachan Group, on Wednesday fixed the price band at Rs 277-291 for its Rs 960 crore initial public offering which is opening next Monday.

The promoters of the fifth largest microlender with Rs 10,800 crore of loan book said that as much as Rs 760 crore of the Rs 960 crore issue will be the primary share sale and the remaining Rs 200 crore will be through the offer for sale (OFS) route.

External investor Greater Pacific Capital, which owns 19.06 per cent of the company, will sell 2.06 per cent of its holding for Rs 50 crore through the OFS.

The promoter family will also dilute its stake through the OFS route.

Muthoot Pappachan Group is a diversified group with interest in gold loan, credit through NBFC arm, real estate, education and hospitality among others. This will be their second public issue after Muthoot Capital, which is a two-wheeler lending Non-Banking Financial Company (NBFC).

Muthoot Pappachan group chairman Thomas John Muthoot told PTI that post-issue, the shareholding in the holding company Muthoot Fincorp will come down to 50.5 per cent from 59 per cent, while that of the members of the promoter family will be halved to 5 per cent.

The company began operations in 2011 and has two external investors.

One of the investors, Creation Capital, entered the firm in 2016 with Rs 50 crore and doubled down with a similar quantum in 2017. It further infused Rs 31 crore in 2018 when Muthoot promoters pumped in Rs 220 crore through a rights issue.

The other investor is Greater Pacific Capital, which owns 19.06 per cent and will be selling 2 per cent of that through the OFS for Rs 50 crore, he said.

Thomas John Muthoot also added that over the years since December 2021, this investor had pumped in USD 60 million (around Rs 500 crore) first and then added up USD 25 million (around Rs 208 crore) more in February 2022 and another USD 10 million (Rs 83 crore) in September 2023.

He said the company will use the proceeds from the fresh share sale towards augmenting capital base to meet future capital requirements.

The company's managing director Thomas Muthoot said the selling shareholders in the OFS are Thomas John Muthoot (Rs 16.36 crore), Thomas Muthoot (Rs 16.38 crore), Thomas George Muthoot, who is an executive director of the company (Rs 16.36 crore). Other family members such as Preethi John Muthoot (Rs 33.74 crore), Remmy Thomas (Rs 33.39 crore), and Nina George (Rs 33.77 crore) are also paring their stake.

Muthoot Microfin chief executive Sadaf Sayeed said the company has been clipping at 36 per cent per annum since the pandemic and had an asset under management (AUM) of Rs 10,800 crore as of the September quarter. Its net income for the first half of the current fiscal year stood at Rs 205 crore, as against Rs 203 crore in FY23.

Of the 32 lakh customers, the company has its largest customer base in the home market of Kerala and the second largest base in the neighbouring Tamil Nadu and also in terms of AUM.

The Thiruvananthapuram-headquartered company operates 1,340 branches across 339 districts spanning 18 states and employees 12,290 people. It had added 260 branches last fiscal and has already opened 160 this fiscal so far, apart from adding 4 lakh customers till September this fiscal, while in the whole of last fiscal it had added 7 lakh customers, Sayeed said.