© Reuters.
Muthoot Microfin, the fourth largest microfinance company in India, has received approval from the Securities and Exchange Board of India (SEBI) for its Initial Public Offering (IPO). The firm, which is the third largest in South India, is primarily focused on providing micro-loans to women in rural areas. Alongside a fresh issue of ₹950 crore ($127 million), existing shareholders will offer a sale of ₹400 crore ($53 million).
The IPO aims to strengthen Muthoot Microfin’s capital base as it seeks to maintain growth in its loan portfolio and asset base. As of March 2023, the company’s capital adequacy stood at 21.87%, significantly surpassing the Reserve Bank of India’s (RBI) minimum requirement of 15%. The firm holds the largest market share in Kerala and a 16% share in Tamil Nadu, serving 2.77 million active customers with a gross loan portfolio of Rs 9,200 crore ($1.23 billion).
Shareholders including Thomas Muthoot, Thomas John Muthoot, Thomas George Muthoot, Preethi John Muthoot, Remmy Thomas, Nina George, and Greater Specific Capital WIV will be offering their shares as part of the IPO. The company had previously attempted an IPO in 2018 but was forced to halt due to unfavorable market conditions.
In the fiscal year ending March 2023, Muthoot Microfin reported revenue and profit of Rs 1,430 crore ($191 million) and Rs 164 crore ($22 million) respectively. The IPO is being managed by ICICI Securities, Axis Capital (NYSE:), JM Financial, and SBI Capital Markets.
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