MUMBAI:
Muthoot Microfin Limited, (the “Company”), part of the Muthoot Pappachan Group, got SEBI go-ahead for the IPO. The Company filed the Draft Red Herring Prospectus (“DRHP”) on July 27, 2018. The IPO comprises of a Fresh Issue aggregating up to Rs. 500 crore (“Fresh Issue”) and an offer for sale by Thomas John Muthoot, Thomas Muthoot, Thomas George Muthoot, Preethi John, Remmy Thomas, Nina George, Muthoot Fincorp Limited (“MFL”), and Creation Investments India LLC, (Together, The “Selling Shareholders” and such Offered Shares, The “Offered Shares”).
The Book Running Lead Managers (“BRLMs”) to the Offer are Edelweiss Financial Services Limited, Motilal Oswal Investment Advisors Limited, Credit Suisse Securities (India) Private Limited and SMC Capitals Limited.
Muthoot Microfin Limited (MFL) is one of the leading micro-finance institutions focused on providing micro-loans to women customers with a focus on rural regions of India. It is the fifth largest NBFC-MFI in India in terms of gross loan portfolio, as of March 31, 2018, according to CRISIL Research.
It has 1.2 million active borrowers, who are served by 467 branches across 168 districts in 16 states and union territories in India, as of March 31, 2018. Its gross loan portfolio was ?2,920.30 crore, while its gross loan portfolio in South India was ?2,485.65 crore, its gross loan portfolio was serviced by 5,583 employees, as of March 31, 2018.
Its total disbursements across all microfinance operations for the financial years 2018, 2017 and 2016 were Rs. 3036.3 crore, Rs. 2028.5 crore and Rs. 765.1 crore, respectively. Its Return on Equity for the financial years 2018, 2017 and 2016 was 18.91%, 28.69% and 25.28%, respectively.
The Company is part of the Muthoot Pappachan Group, which is one of the leading business conglomerates in South India, with presence across financial services, automotive, hospitality, real estate, healthcare, information technology, precious metals and alternate energy sectors.
It also leverages the infrastructure and branch network of one of its Promoters, Muthoot Fincorp Limited (“MFL”), for loan disbursements, collections of receipts and collection of processing fee, insurance and any other receipts to ensure safety, efficient and better management of cash and to offer products and services in a more effective manner.
The Company’s wide range of lending products is aimed at catering to the life-cycle needs of rural households.
Leveraging technological initiatives, it has increased the average number of borrowers served per branch from 1,638 as of March 31, 2016 to 2,591 as of March 31, 2018. Historically, it has built distribution infrastructure near and around the branches of Promoter, MFL, in order to leverage on a hub and spoke model.
MFL endeavours that branches are located within a radius of fifteen kilometres from MFL’s branches and that centers are located within four to five kilometres of MFL’s branches and also in close proximity of borrowers’ homes. As of March 31, 2018, it employed 4,639 branch managers, credit officers and relationship officers.
