Muthoot Microfin Limited IPO is all set to open from 18th December to 20th December 2023 

The Muthoot Microfin IPO price band has been fixed in the range of ₹277 to ₹291 per equity share of the face value of ₹10

Continuity in vision and management by a stable team is a key factor of the performance of the Company

BILKULONLINE

By Rafat Quadri

Ahmedabad, Dec 14: Muthoot Microfin IPO will open for subscription from December 18, 2023 and close on December 20, 2023. The stock of Muthoot Microfin Ltd has a face value of ₹10 per share and the price band for the book building IPO has been set in the range of ₹277 to ₹291 per share.

Thomas John Muthoot, Group Chairman of Muthoot Pappachan Group explained the important details of the IPO of the Muthoot Microfin “IPO price band is set at ₹277 to ₹291 per share. The minimum lot size for an application is 51 Shares. The minimum amount of investment required by retail investors is ₹14,841. The minimum lot size investment for sNII is 14 lots (714 shares), amounting to ₹207,774, and for bNII, it is 68 lots (3,468 shares), amounting to ₹1,009,188.”

Thomas Muthoot, Managing Director of Muthoot Microfin while explaining the objectives of the forthcoming IPO said “The Company proposes to utilise the Net Proceeds from the Fresh Issue towards augmenting the capital base to meet future capital requirements. The main objects and objects incidental and ancillary to the main objects set out in the Memorandum of Association enable the company: (i) to undertake our existing business activities, and (ii) to undertake the activities proposed to be funded from the Net Proceeds. Further, the Company expects to receive the benefits of listing the Equity Shares on the Stock Exchanges, including enhancing the brand image among existing and potential customers and creating a public market for the Equity Shares in India”.

“The microfinance business was originally established as a division of Muthoot Fincorp Limited in 2010. In December 2011, the Muthoot Pappachan Group acquired Pancharatna Securities Ltd, a non-banking financial company (NBFC) based in Mumbai, and subsequently rebranded it as Muthoot Microfin Limited (MML)” added Thomas Muthoot.

Sadaf Sayeed, the Chief Executive Officer at Muthoot Microfin took the media persons on a digital journey of the company’s finances and management.

Sadaf claimed that “Our Company has the strength of possessing a stable management and continuity of management and vision. This makes it a strong entity resulting in great financial performance ear after year.

We have a team of 12,297 staff members working in 18 states of India from 1340 branches. Our head office is at Kochi, Kerala. Muthoot Microfin Limited (MML), the microfinance arm of Muthoot Pappachan Group is one of the leading and fast-growing microfinance institutions (NBFC-MFI) in India. The company is focused on providing micro-loans to women entrepreneurs with a focus on rural regions of India. The Muthoot Pappachan Group has a history of over 50 years in the financial services business. MML is the second largest company under the Muthoot Pappachan Group, in terms of AUM for the Financial Year 2023. MFL, the flagship company of the Muthoot Pappachan Group, holds 59.29% of the pre-Offer Equity Share capital in the Company, on a fully diluted basis, as of the date of this Red Herring Prospectus. Its relationship with the Muthoot Pappachan Group provides it with brand recall and significant marketing and operational benefits. It is the fifth largest NBFC-MFI in India in terms of gross loan portfolio as of March 31, 2023 (Source: CRISIL Report). The company is also the third largest amongst NBFC-MFIs in South India in terms of gross loan portfolio, the largest in Kerala in terms of MFI market share, and a key player in Tamil Nadu with an almost 16% market share, as of March 31, 2023 (Source: CRISIL Report).

As of September 30, 2023, its gross loan portfolio amounted to Rs. 10867.07 cr. As of September 30, 2023, it had 3.19 million active customers, who are serviced by 12,297 employees across 1,340 branches in 339 districts in 18 states and union territories in India. It has built its branch network with an emphasis on under-served rural markets with growth potential, in order to ensure ease of access to customers. MML’s branches are connected to its IT networks and are primarily located in commercial spaces which are easily accessible by customers.

Sadaf elaborated the activities of the company saying “Its wide range of lending products is aimed at catering to the life-cycle needs of rural households. MML primarily provides loans for income generating purposes to women customers living in rural areas. Its loan products comprise (i) group loans for livelihood solutions such as income generating loans, Pragathi loans (which are interim loans made to existing customers for working capital and income generating activities), individual loans and Suvidha loans (which are digital loans accessible through the Mahila Mitra application and made to existing customers to enable quick access to funds); (ii) life betterment solutions including mobile phones loans, solar lighting product loans and household appliances product loans; (iii) health and hygiene loans such as sanitation improvement loans; and (iv) secured loans in the form of gold loans and its Muthoot Small & Growing Business (“MSGB”) loans”.

 

It should be noted that over the past few years, the company has significantly implemented the use of technology across its microfinance operations. The company has an in-house information technology team that has built its technology platform into a business tool, which helps the company in achieving and maintaining high levels of customer service, enhancing operational efficiency and creating competitive advantages for the organization. To improve its underwriting capabilities using technology, the company has developed
a unique credit score card along with Equifax to evaluate the creditworthiness of customers by assigning individual credit scores to customers. It has 116 ‘Adarsh’ branches pan India where 90% functioning is carried out digitally. ‘Mahila Mitra’ App is the empowering feature of the company which aims to make its customer base (the low income group women) go digital. 15 lakh downloads of the app have already been done. The company claims to be digitally receiving 33% of its dues from its customers and rest is deposited through upi or bank deposits or collected by its staff members. Overall the company doesn’t entertain a non-banking account customer to lend any loan, in order to keep transparency and clean functioning.

During Covid-19 the resilience of the company’s astute functioning has added feather in its functioning at a testing time nation-wide.

The rate of interest is 23.5% on its loans provided by the company.

ICICI Securities, Axis Capital, JM Financial and SBI Capital Markets are the book running lead managers of the Muthoot Microfin IPO, while Kfin Technologies is the registrar for the issue. Shares of the company will be listed on both BSE and NSE on December 26, Tuesday.

On the occasion of the announcement of IPO details the management team of Muthoot Group was present in Ahmedabad comprising of Thomas John Muthoot, Group Chairman, Thomas Muthoot, Managing Director, Sadaf Sayeed, the Chief Executive Officer, Praveen T, the Chief Financial Officer, Udeesh Ullas, Chief Operating Officer and Rajat Rawal represented the ICICI Securities Limited.

If you are looking for ways to earn a regular income from fixed return investments, an NCD investment can be a good option. Furthermore, one of the most trusted brands in India, Muthoot Finance regularly issues NCDs and it could be a great addition to your portfolio!

Disclaimer: Investors must understand all the details of the company before investing.

(Rafat Quadri can be contacted at editorbilkul@gmail.com)