Muthoot Microfin, a leading microfinance institution specializing in small loans to rural women, has taken a significant step towards its growth and expansion plans by filing its Draft Red Herring prospectus with the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO). The company aims to raise approximately Rs 1,350 crore through a combination of fresh issue and offer for sale of shares.
As of December 31, 2022, Muthoot Microfin stands as the fourth largest microfinance institution (NBFC) in terms of the gross loan portfolio. In South India, it holds the third-largest position among NBFC-MFIs in terms of the gross loan portfolio and holds the largest market share among MFI companies in Kerala. The company is also a key player in Tamil Nadu, where it boasts an impressive market share of almost 16%.
To fund its growth initiatives, Muthoot Microfin plans to utilize the funds raised from the IPO. The company intends to issue equity shares with a face value of Rs 10 each, aggregating up to Rs 1,350 crore. This includes a fresh issue of equity shares by the company amounting to Rs 950 crore and an offer for sale of equity shares by selling shareholders totaling Rs 400 crore.
The offer for sale comprises shares valued at up to Rs 70 crore each by Thomas John Muthoot, Thomas Muthoot, and Thomas George Muthoot. Preethi John Muthoot and Remmy Thomas will offer shares worth up to Rs 30 crore each, while Nina George will offer shares worth up to Rs 30 crore. The selling shareholders collectively referred to as the ‘promoter selling shareholders’. Additionally, equity shares valued at up to Rs 100 crore will be offered by Greater Pacific Capital WIV Ltd, referred to as the ‘investor selling shareholder’. Together, the selling shareholders and the investor selling shareholder will make up the equity shares offered for sale.
The IPO represents a significant milestone for Muthoot Microfin, as it aims to capitalize on the strong demand for its services and expand its reach to serve a larger number of rural women. The funds raised through the IPO will support the company’s growth plans, including the expansion of its branch network, investment in technology infrastructure, and enhancement of its loan portfolio.
Muthoot Microfin has built a reputation for its commitment to financial inclusion and empowering women in rural areas. By providing small loans to women entrepreneurs, the company plays a crucial role in driving economic growth and social development in these communities. The IPO will enable the company to further scale its operations and make a positive impact on a larger scale.
The microfinance industry in India has witnessed significant growth in recent years, driven by the increasing demand for credit among underserved sections of society. Muthoot Microfin is well-positioned to capitalize on this growing market, leveraging its experience, expertise, and extensive network to reach more borrowers and fulfill their financial needs.
As the company moves forward with its IPO plans, it aims to strengthen its position in the microfinance sector, continue its mission of empowering women entrepreneurs, and contribute to the socio-economic development of rural India. The IPO will not only provide a significant boost to Muthoot Microfin’s growth trajectory but also open up opportunities for investors to be a part of its inspiring journey.
