Muthoot Microfin IPO opens; 82% subscribed on the first day
The company will use the proceeds from the fresh share sale towards augmenting capital base to meet future capital requirements
New Delhi: The initial public offering of Muthoot Microfin, the microfinance subsidiary of Muthoot Pappachan group, got subscribed 82 per cent on the first day of offer on Monday. The Rs960 crore-initial share sale received bids for 2,00,28,108 shares against 2,43,87,447 shares on offer, as per NSE data. The quota for Retail Individual Investors (RIIs) received 1.37 times subscription while the portion for non-institutional investors got subscribed 60 per cent.
The Initial Public Offering (IPO) has a fresh issue of up to Rs760 crore and an Offer for Sale (OFS) component of Rs200 crore. The IPO has a price range of Rs277-291 a share. The company has mopped up Rs284.99 crore from anchor investors. They include Muthoot Finance, WCM International Smallcap Fund, Icici Prudential Life and HDFC Life. Muthoot Microfin is promoted by Muthoot Fincorp, which is the third-largest gold loan player and the flagship firm of Muthoot Pappachan group. The company plans to use proceeds from the fresh issue for augmenting its capital base, to meet future capital requirements.
Earlier, the Muthoot Pappachan group company Chairman Thomas John Muthoot had said that post-issue, the shareholding of the holding company Muthoot Fincorp will come down to 50.5 per cent from 59 per cent while that of the members of the promoter family will be halved to 5 per cent. The company, which began operations in 2011, has two external investors -- Creation Capital and Greater Pacific Capital.
Creation Capital entered the firm in 2016 with Rs50 crore and doubled down with a similar quantum in 2017 and an additional Rs31 crore in 2018. It owns 9.3 per cent in the company and is not participating in the OFS but in the IPO, he had said. He had also said that Greater Pacific Capital, which owns 19.06 percent stake, is selling 2 per cent of the shareholding through the OFS for Rs50 crore. The company will use the proceeds from the fresh share sale towards augmenting capital base to meet future capital requirements. ICICI Securities, Axis Capital, JM Financial and SBI Capital Markets are the managers to the offer.
