Muthoot Microfin to raise Rs 1,000 crore ($150 million USD) via IPO – Economic Times

Written by Patrick Fisher July 11, 2018 0 comment

By Saloni Shukla, Saikat Das

Economic Times India

MUMBAI: Muthoot Microfin Ltd (MML), a part of the Muthoot Pappachan Group, plans to raise Rs 1,000 crore in an initial public offering that would value the firm anywhere between Rs 4,000 and Rs 5,000 crore.
The company has appointed Motilal Oswal, Edelweiss and Credit Suisse as its merchant bankers for the issue and a draft red herring prospectus (DRHP) could be filed as early as the next two weeks, people familiar with the matter told ET.
For its part, MML told ET in an e-mail that “we continue to explore various opportunities and we are watching the developments in the industry closely; but at the moment, we have no definite update to share…”

In the run-up to its IPO plans, MML has also raised Rs 250 crore to drive its microfinance business and expand its footprint in the country. This was infused by the existing promoters and US based PE Investor Creation Investments via a rights issue, taking the total capital base to Rs 614 crore at the end of FY 2018.
MML was rated M1C1 from CRISIL in April, the highest Comprehensive Microfinance Grading. Based on its growth rate and capital strength, CRISIL also upgraded the long-term debt instruments rating of the company to ‘A stable’.
Last month, Bengaluru-based microfinance firm Credit Access Grameen Ltd received Sebi’s go-ahead for a Rs 1,500-crore IPO. Spandana microfinance has also filed DHRP with the markets regulator for an IPO.

The microfinance industry is going through a phase of consolidation. Last year, IndusInd Bank acquired Bharat Financial Inclusion, followed by Kotak Mahindra Bank’s acquisition of BSS Microfinance.