Muthoot Finance shares are expected to be in focus on September 3 after its microfinance subsidiary, Belstar Microfinance, received approval from market regulator SEBI to proceed with its initial public offering (IPO). The IPO will include a fresh issue of Rs 1,000 crore and an offer for sale (OFS) worth Rs 300 crore.
In the OFS, Danish asset management firm MAJ Invest will sell shares worth Rs 175 crore, followed by Arum Holdings with Rs 97 crore, and Augusta Investments Zero Pte with Rs 28 crore. The IPO will be managed by ICICI Securities, Axis Capital, HDFC Bank, and SBI Capital Markets.
MAJ Invest has been involved with Belstar Microfinance since 2018, making additional investments in 2022. Currently, Muthoot Finance holds a majority stake of just over 66 percent in Belstar Microfinance.
Money from the fresh issue will be used to meet future capital requirements for onward lending; the balance of proceeds will be used for general corporate purposes.
Belstar Microfinance is an NBFC-MFI with a range of products, including but not limited to micro-enterprise, small enterprise, consumer goods, festival, education, and emergency loans. The company follows primarily the SHG model, which accounts for 57% of the total loan portfolio of the company as of December 31, 2023.
According to its draft red herring prospectus, Belstar Microfinance reported total revenue from its operations at Rs 1,283 crore on December 31, 2023, compared with Rs 727 crore on March 31, 2022. In the first quarter of FY25, the profit skyrocketed to Rs 235 crore, against Rs 45 crore in the corresponding period of the last fiscal year.
In the June quarter, Muthoot Finance made the highest-ever consolidated profit of Rs 1,196 crore, while consolidated loan assets under management grew to Rs 98,048 crore.
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Source: Moneycontrol
News Desk
