Muthoot Microfin, the fourth-largest microfinance company in India, has received the green light from the Securities and Exchange Board of India (SEBI) to proceed with its highly anticipated Initial Public Offering (IPO). The firm, renowned as the third-largest microfinance institution in South India, primarily dedicates its efforts to extending micro-loans to women residing in rural areas. This landmark IPO comprises a fresh issue of ₹950 crore ($127 million), alongside existing shareholders offering a sale of ₹400 crore ($53 million).
The IPO’s fundamental objective is to fortify Muthoot Microfin’s capital base as it forges ahead in its pursuit of sustained growth within its loan portfolio and asset base. As of March 2023, the company boasted a robust capital adequacy ratio of 21.87%, significantly exceeding the Reserve Bank of India’s (RBI) mandated minimum requirement of 15%. Notably, the firm dominates the market, holding the largest share in Kerala and a substantial 16% stake in Tamil Nadu. It caters to a commendable 2.77 million active customers while maintaining a formidable gross loan portfolio valued at Rs 9,200 crore ($1.23 billion).
A consortium of prominent shareholders, including Thomas Muthoot, Thomas John Muthoot, Thomas George Muthoot, Preethi John Muthoot, Remmy Thomas, Nina George, and Greater Specific Capital WIV, will partake in the IPO by offering their shares. It’s worth noting that the company’s previous attempt to go public in 2018 had to be shelved due to unfavorable market conditions.
In the fiscal year concluding in March 2023, Muthoot Microfin reported a commendable revenue of Rs 1,430 crore ($191 million) and a profit of Rs 164 crore ($22 million). The IPO proceedings will be orchestrated by the adept teams of ICICI Securities, Axis Capital (NYSE:AXS), JM Financial, and SBI Capital Markets.
