Muthoot Microfin Ltd IPO

Muthoot Microfin Ltd IPO

Muthoot Microfin is coming up with an IPO worth INR 1350 crores. The offer consists of a fresh issue of shares worth INR 950 crores and an offer to sell 400 crores of existing equity shares. The company will use the funds raised to augment the capital base of the company.

Muthoot Microfin Ltd IPO – Important Details

Muthoot Microfin IPO DateDecember 18, 2023 to December 20, 2023
Muthoot Microfin IPO Listing DateDecember 26, 2023
Muthoot Microfin IPO PriceINR 277 to 291 per share
Muthoot Microfin IPO Lot Size51 Shares
Muthoot Microfin IPO Total Issue SizeINR 1350 crores
Muthoot Microfin IPO Basis of AllotmentDecember 21, 2023
Muthoot Microfin IPO Initiation of RefundsDecember 22, 2023
Muthoot Microfin IPO Credit of Shares to DematDecember 22, 2023
Muthoot Microfin IPO Issue TypeBook Built Issue IPO
Muthoot Microfin IPO Listing AtBSE, NSE

Muthoot Microfin Ltd IPO – Company Profile

Muthoot Microfin is a microfinance institution providing microloans to female customers (primarily for income generation purposes) focusing on rural regions of India. They are the fourth largest NBFC-MFI in India and the third largest among NBFC-MFIs in South India.

The company focuses on financial inclusion, serving low-income groups with a network of 1,172 branches in 18 states. They prioritize under-served rural markets, emphasizing accessibility and connectivity, serving 2.77 million customers.

The company specializes in rural household financial services with a focus on women. They offer diverse loan products for income generation, life improvement, and health. Their joint liability group model empowers women in lower-income households, leveraging the Muthoot Pappachan Group’s experience.  

Muthoot Microfin Limited IPO  – Fundamental Analysis

Muthoot Microfin Limited experienced impressive revenue growth and improved profits, reflecting enhanced operational efficiency. However, rising reliance on external funding and debt raises concerns despite positive indicators in assets and shareholder returns.

Revenue Growth: 

The company has shown significant growth in revenue over the past three years, with a substantial increase from ₹6,841.67 million in 2021 to ₹14,287.64 million in 2023. This indicates an impressive growth trajectory.

Equity and Liabilities: 

Equity has increased steadily from ₹8,898.90 million in 2021 to ₹16,258.49 million in 2023. Meanwhile, total liabilities have also increased, indicating increased reliance on external funding sources.

Expenses and Profit After Tax (PAT): 

While expenses have grown, the company increased its Profit After Tax substantially, showcasing improvement in operational efficiency. The PAT rose from ₹70.54 million in 2021 to ₹1,638.89 million in 2023.

Return on Net Worth (RoNW): 

The RoNW has been increasing steadily, reflecting the company’s ability to generate profits in relation to its net worth. This is a positive indicator of efficient use of shareholder funds.

Net Asset Value (NAV) and EPS: 

Both the NAV per Equity Share and Diluted EPS have shown consistent growth, indicating a positive trend in the company’s valuation and earnings potential.

Debt-Equity Ratio: 

The Debt-Equity ratio, while reducing slightly in 2022, increased in 2023, indicating a higher reliance on debt funding. A higher ratio could potentially raise concerns about the company’s leverage.

Return on Assets (ROA): 

The Return on Assets has also been increasing, which means the company is becoming more efficient in generating profits relative to its total assets.

Muthoot Microfin IPO Financial Information

ParticularAs at 31 March 2021As at 31 March 2022As at 31 March 2023
Revenue (₹ in Million)6,841.678,325.0614,287.64
Equity (₹ in Million)8,898.9013,365.7916,258.49
Expenses (₹ in Million)6,872.267,782.2012,334.74
Profit and Loss After Tax (₹ in Million)70.54473.981,638.89
RoNW (%)0.793.5510.08
NAV per Equity Share (₹)77.94117.07139.15
Diluted EPS only (₹)0.623.9711.98
Total Assets (in million)41,838.4855,914.5885,291.99
Total Liabilities (in million)32,939.5842,548.7969,033.5
Debt Equity Ratio2.552.243.29
Return on Assets0.1%1.3%2.2%

Muthoot Microfin Limited IPO Peer Comparison

Muthoot Microfin demonstrates a solid 10.08% RoNW and ₹139.15 NAV/share. Its P/E ratio is unavailable, which distinguishes it from peers. Equitas Small Finance Bank and Credit Access Grameen showcase substantial total income. Spandana Sphoorty stands out with a high P/E ratio despite a comparatively lower RoNW.

CompanyTotal Income (₹ in million)Face Value per Equity Share (₹)P/EEPS (Basic) (₹)EPS (Diluted) (₹)RoNW (%)NAV per Equity Share (Basic) (₹)
Muthoot Microfin Limited14,463.4410NA14.1911.9810.08139.15
Equitas Small Finance Bank Limited48,314.641017.574.714.6711.1246.44
Ujjivan Small Finance Bank Limited47,541.90106.335.885.8727.7920.25
Credit Access Grameen Limited35,507.901026.6752.0451.8216.18326.89
Spandana Sphoorty Financial Limited14,770.3210318.721.741.740.40436.58
Bandhan Bank Limited183,732.501017.3213.6213.6211.21121.58
Suryoday   Small Finance Bank Limited12,811.001022.317.327.324.90149.28
Fusion Micro Finance Limited17,999.701012.6043.2943.1316.67230.74

Muthoot Microfin IPO Objective

Muthoot Microfin Limited proposes to utilize the Net proceeds from the fresh issue towards augmenting the  Bank’s Tier – I capital base to meet the bank’s future capital requirements and increase the business. 

With the offer to sell shares worth INR 400 crores, the company achieves the benefit of listing on the stock exchange.  

Muthoot Microfin Limited IPO Risks And Challenges

Muthoot Microfin Limited, which is a micro-loan business, risks higher defaults and serves low-income women lacking credit history. The importance of the “Muthoot” brand for customer retention underscores growth challenges if awareness falters. Acknowledging cyber-fraud risk and implementing security breaches may impact businesses, triggering regulatory scrutiny, litigation, and financial liability.

  • The micro-loan business targets women with annual incomes up to ₹300,000 who lack traditional credit histories. Limited financial information makes consistent credit risk analysis challenging, posing higher default risks. Unsecured loans rely on joint liability mechanisms, but effectiveness in ensuring repayment is uncertain, potentially leading to higher loss risks than other financing products.
  • The company relies on the “Muthoot” brand recognition. Failing to use, maintain, and enhance brand awareness could negatively impact customer retention and expansion efforts, emphasizing the crucial role of brand perception.
  •  The company acknowledges the risk of cyber fraud and attacks, including hacking and data theft. Although they have implemented security measures, they cannot guarantee immunity. Potential breaches may impact business and result in regulatory scrutiny, litigation, and financial liability.

Muthoot Microfin IPO – Industry & Market Potential

The microfinance industry has experienced rapid expansion due to small loan sizes and doorstep disbursement. Diversified portfolios across geographies help mitigate concentration risks, while larger-scale operations enable cost reduction as a percentage of outstanding loans.

The Indian microfinance industry has transformed digitally, adopting initiatives like mobile apps, Aadhaar-based authentication, and cashless transactions. Partnerships with fintech firms enhance services, offering digital payment solutions, credit scoring, and loan management, fostering transparency, reducing costs, and improving customer experience.

Potential harmonization of regulations in MFI lending aims to create a level playing field by applying standard definitions, Board-approved income policies, capped repayments, flexible terms, no penalties or collateral, transparent pricing, and aligning guidelines for NBFC-MFIs with broader NBFC regulations, fostering industry equity and transparency.

Muthoot Microfin IPO – Type of Offer

Muthoot Microfin plans a fresh issue of shares, seeking INR 950 crores to augment the capital needs of the company. Additionally, the company proposes an offer for sale, intending to sell 400 crore existing shares.

1. Fresh Issue: The company will issue new shares to raise capital, aiming to collect INR 950 crores. The company intends to utilize the proceeds from the fresh issue for current and proposed activities. It anticipates the benefits of listing on stock exchanges, enhancing brand image, and market creation.

2. Offer for sale: Muthoot Microfin is offering to sell 400 crore existing shares. The following are the details of the existing shareholders who are also the promoters selling the shares:

Name of the promoter selling shareholderMaximum number of offered shares for sale (in million)
Thomas John Muthoot700
Thomas Muthoot700
Thomas George Muthoot700
Preethi John Muthoot300
Remmy Thomas300
Nina George300

Muthoot Microfin Limited IPO Offer Size

Muthoot Microfin plans to launch an Initial Public Offering (IPO) valued at INR 1350 crores. This comprises a new issuance of shares totaling INR 950 crores and the sale of 400 crores of existing equity shares. The funds generated will be utilized to strengthen the company’s capital foundation.

Muthoot Microfin Ltd IPO Allotment Structure

Muthoot Microfin allocation will be as follows: 75% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII) by SEBI regulations. A portion of the issue is also set aside for the eligible employees.

Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.

Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.

Retail Individual Investors (RII): The remaining 35% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs.

Eligible Employees: A portion of the issue is reserved for eligible employees. 

How to apply for an Muthoot Microfin IPO?

To apply for the Muthoot Microfin IPO through Alice Blue, you would typically follow these steps:

1. Open a Demat and Trading Account: If you don’t have one already, you would need to open a Demat and trading account with Alice Blue.

2. Check for IPO Details: Once your account is active, you can check for the Muthoot Microfin IPO details in the IPO section of the Alice Blue platform.

3. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.

4. Submit the Application: Confirm all your details and submit your application.

 You can apply for Muthoot Microfin Limited’s IPO at Alice Blue [M1] in just a few clicks!

Check Allotment Status: Post the allotment process, you can check the allotment status to see if you have received any shares.

Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.

How to Check Muthoot Microfin IPO Allotment Status on Alice Blue?

Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:

1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or their trading app.

2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.

3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.

4. Select the Muthoot Microfin IPO: If you have applied for multiple IPOs, there might be a dropdown menu or lists where you can select the IPO you are interested in. Select the Muthoot Microfin IPO.

5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.

 If you face any issues, it’s recommended to contact Alice Blue’s customer support for detailed assistance.

Apart from Alice Blue, there are other ways to check the allotment status of the Muthoot Microfin IPO:

Registrar’s Website: Visit the website of KFin Technologies Limited, the registrar of the Muthoot Microfin IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN and application number or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status.

NSE and BSE: You can also check the allotment status on the official websites of the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). You would need your application number and PAN to check the status.

Please note that the allotment status will only be available after the allotment process has been completed, a few days after the IPO window closes.

Muthoot Microfin IPO Offer Registrar

The registrar for the Muthoot Microfin IPO is KFin Technologies Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.

Contact information for the registrar:

KFin Technologies Limited

Selenium Tower B, Plot No. 31, 32

Gachibowli, Financial District

Nanakramguda, Serilingampally

Hyderabad, 500 032

Telangana, India

Tel: +91 40 6716 2222

E-mail: [email protected]

Website: www.kfintech.com

Muthoot Microfin IPO FAQs

1. What is the allotment date of the Muthoot Microfin IPO?

The allotment date of the Muthoot Microfin IPO is December 21, 2023.

2. What is the price band of the Muthoot Microfin IPO?

The price band of the Muthoot Microfin IPO is INR 277 to 291 per share.

3. What is the size of the Muthoot Microfin IPO?

Muthoot Microfin plans to launch an Initial Public Offering (IPO) valued at INR 1350 crores. This comprises a new share issuance of INR 950 crores and the sale of 400 crores of existing equity shares. The funds generated will be utilized to strengthen the company’s capital foundation. Here are key details about the Muthoot Microfin Ltd IPO.

4. What is the listing date of the Muthoot Microfin IPO?

The listing date of the Muthoot Microfin IPO is December 26, 2023.

Click the link to access the web story now: Muthoot Microfin IPO

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