The buzz around Muthoot Microfin’s IPO has been building, and it’s no surprise why. With a robust track record in the financial sector, their IPO is one of the most anticipated market events. I’ll walk you through what you need to know about this significant move, including the Grey Market Premium (GMP) and how it could shape the market’s landscape.
If you’re considering diving into the IPO pool, understanding the nuances of Muthoot Microfin’s offering is crucial. From how to apply to analyzing their financial health, I’ve got the insights that could help you make an informed decision. So, let’s get ready to explore the potential of Muthoot Microfin’s IPO and what it means for investors like you.
Muthoot Microfin IPO Details
In the buzzing financial market, significant chatter about the Muthoot Microfin IPO has potential investors circling their calendars. I’ve closely monitored every detail to ensure savvy investors have all the information needed. This offering is distinguished by its capacity to aid retail individual investors, who have a 35% quota in the issue, reflecting an encouraging sign for the small investor community.
But it’s not just the retail investors who’ll have a shot at this opportunity – Qualified Institutional Buyers (QIBs) are allocated a 50% quota, while High Net Worth Individuals (HNIs) are catered for with a 15% slice of the pie. This equitable distribution ensures that all classes of investors have the chance to participate in Muthoot Microfin’s success story.
The numbers paint a striking picture of the scale of this IPO, with the total size panning out to 32,989,690 shares. Here’s the breakdown:
|Aggregation (₹ Cr)
|Offer for Sale
Eager participants should note that shares come with a face value of ₹10, snuggled within a price band of ₹277 to ₹291. This makes the minimum lot size an accessible 51 shares, accommodating a wide range of investment appetites.
Lastly, an attractive perk catches the eye – an Employee Discount standing at Rs 14 per share, showcasing the company’s commitment to benefiting its workforce alongside external investors. This book-built issue IPO is poised to grace the floors of BSE and NSE, further elevating the buzz surrounding it.
To fully grasp the impact of this financial maneuver, let’s glance at Muthoot Microfin’s pre and post-issue shareholding. The count prior to the issue stands at 116,837,249 shares, which will escalate to 142,954,087 shares post-IPO, marking a pivotal expansion for the company.
Muthoot Microfin IPO Timeline
One critical element that potential investors eye is the IPO timeline. The opening shot for the Muthoot Microfin IPO is set for December 18, 2023, kicking off a window of opportunity for those looking to invest in one of India’s leading microfinance institutions. The subscription window remains open briefly, concluding on December 20, 2023. It’s essential for investors to be quick on their feet, as these dates indicate a limited time to take action. To ensure participation, the cut-off time to confirm the UPI mandate is by 5 PM on the closing day of the IPO.
Following the closure of the IPO, the Basis of Allotment will be finalized by December 21, 2023. This step is crucial as it reveals the number of shares allocated to each type of investor. Subscribers can anticipate the Initiation of Refunds on December 22, 2023, should there be an oversubscription or if they’re not allotted the number of shares they bid for.
Additionally, investors can expect the Credit of Shares to their Demat accounts on December 22, 2023, aligning with the initiation of refunds. This synchronization ensures that funds and shares are managed efficiently and without unnecessary delay.
Marking its entry onto the stock exchanges, Muthoot Microfin is penned in for a December 26, 2023, Listing Date. This will be an important day for the company and its investors, as it will set the initial trading price and commence the stock’s journey in the BSE and NSE.
Stay tuned to the timeline; each date plays a significant part. From the start of the subscription to the listing on the stock exchanges, it’s a meticulously planned journey ensuring transparency and adherence to regulatory requirements. Whether you’re a seasoned investor or a newbie, keeping an eye on these dates is paramount to participating in the Muthoot Microfin IPO.
|Basis of Allotment
|Initiation of Refunds
|Credit of Shares to Demat
|Cut-off time for UPI mandate confirmation
Muthoot Microfin IPO Lot Size
Understanding the lot size is crucial for making informed decisions when investing in an IPO. The Muthoot Microfin IPO has specific lot sizes catering to different investor types. Retail investors have a minimum lot size of 51 shares, which means the smallest amount they can invest is ₹14,841. For those looking to maximize their investment, the retail category allows a maximum of 13 lots, which translates to 663 shares, or ₹192,933.
The investment brackets broaden in the High Net Worth Individual (HNI) category. Small HNIs (S-HNI) can invest at least 14 lots (714 shares) at ₹207,774. The maximum investment for S-HNIs is capped at 67 lots, equaling 3,417 shares worth ₹994,347. The Big HNIs (B-HNI) segment has an even larger scale, starting at 68 lots (3,468 shares) for a minimum investment of ₹1,009,188.
Here’s a quick glance at the lot size and investment for different categories:
The Muthoot Microfin IPO Lot Size Calculator is essential for precise calculations and determining how many lots an individual can apply for. It considers the current IPO price band and helps calculate the exact amount needed to apply. It’s a convenient way to ensure you’re investing the right amount that aligns with your financial goals.
Muthoot Microfin IPO Promoter Holding
When delving into the details of the Muthoot Microfin IPO, examining the stakeholders’ transition before and after the public offering is pivotal. The promoters of Muthoot Microfin have been integral to its operations, and their holding patterns are of interest to potential investors.
Before the IPO, the key figures holding the reins included Thomas John Muthoot, Thomas Muthoot, Thomas George Muthoot, Preethi John Muthoot, Remmy Thomas, Nina George, and Muthoot Fincorp Limited. Collectively, they held a commanding 69.08% stake in the company. However, with the release of the IPO, there’s a planned shift in this holding.
Here’s a quick glance at the pre and post-issue shareholding:
|Pre Issue Share Holding (%)
|Post Issue Share Holding (%)
After the IPO goes live, their collective shareholding is set to reduce to 55.47%. This significant transition underlines the dilution of stake that the promoters have consented to in a bid to infuse fresh capital into the company.
The reduction reflects the capital reorganization intended to drive further growth and expansion. It’s essential for investors to consider these changes, as they can have implications for future corporate governance and decision-making processes within Muthoot Microfin. The offer for sale as part of the IPO will allow investors to own a slice of the company while also providing the existing promoters the liquidity to fund new ventures or pay off existing obligations.
With the IPO, Muthoot Microfin marks a new phase in its journey, reinforcing its capabilities to increase its footprint in the microfinance sector and potentially enhance shareholder value over time. The structured reorientation of stakeholding echoes the company’s commitment to a broad-based ownership model. It strengthens the confidence of retail and institutional investors considering buying into the public offer.
Muthoot Microfin IPO Reservation
When considering investing in the highly anticipated Muthoot Microfin IPO, it’s critical to understand how the shares are distributed across different investor categories. According to SEBI regulations, the allotment process ensures a diversified set of shareholders, reinforcing confidence in the company’s broad-based ownership aim.
Let’s delve into the specifics of the share reservation. The IPO comprises a whopping INR 1,350 crores, with a significant portion specifically earmarked for different investor classes. Qualified Institutional Buyers (QIBs) will have up to 50% of the Net Issue reserved for them. These players typically include financial institutions such as mutual funds, banks, and insurance companies, recognized for bringing stability and credibility to the shareholder base.
For Retail Individual Investors (RIIs), who often look to invest with an application size of less than INR 2 lakhs, a minimum of 35% of the Net Issue is set aside. This move enables individual investors to partake in Muthoot Microfin’s growth journey, democratizing the investment process.
Lastly, the Non-Institutional Investors (NIIs) or High Net-Worth Individuals (HNIs) category will have at least 15% of the Net Issue allocated to them. These investors typically include corporate bodies and individuals who can invest large sums, contributing to a solid investment foundation.
Below is a breakdown of the IPO reservation:
|Not more than 50% of Net Issue
|Not less than 35% of Net Issue
|NII (HNI) Shares
|Not less than 15% of Net Issue
For those considering the Muthoot Microfin IPO, understanding these reservations helps better plan the investment strategy. It’s essential to consider these allocations when preparing to place bids.
Muthoot Microfin Limited Financial Information
When assessing an IPO, savvy investors focus keenly on financials, and Muthoot Microfin Limited presents a solid growth history. The company’s assets have substantially risen over three consecutive fiscal years. Specifically, assets increased from INR 4,183.85 crore in March 2021 to INR 5,591.46 crore in March 2022 and to INR 8,529.20 crore in March 2023.
This uptrend isn’t limited to assets alone. Muthoot Microfin’s revenue trajectory is equally impressive, with a leap from INR 696.28 crore in March 2021 to INR 842.94 crore in March 2022 before hitting INR 1,446.34 crore in March 2023.
Let’s delve deeper into the profitability aspect. The Profit After Tax (PAT) showcases a dramatic increase, highlighting the company’s bolstering financial health. From a mere INR 7.05 crore in March 2021, the PAT surged to INR 47.40 crore in March 2022 and then to a robust INR 163.89 crore in March 2023.
With this financial backdrop, it’s essential to consider the company’s net worth and reserves. Muthoot Microfin’s net worth escalated from INR 889.89 crore in 2021 to INR 1,336.58 crore in 2022, reaching INR 1,625.85 crore by March 2023. Reserves and Surplus followed suit, improving from INR 642.84 crore in 2021 to INR 1,040.10 crore in 2022, then to INR 1,282.15 crore in 2023.
Here’s a snapshot of Muthoot Microfine’s financial indicators:
|31 Mar 2021
|31 Mar 2022
|31 Mar 2023
|Assets (INR Cr)
About Muthoot Microfin Limited
Established as a division within the Muthoot Pappachan Group, Muthoot Microfin Limited (MML) has crafted a significant niche in the Indian financial sector, particularly as a nonbanking financial company (NBFC-MFI). It has steadily evolved since 2010, demonstrating a robust commitment to empowering women in India’s rural heartland. By March 2015, the institution fortified its standing in the microfinance sector by securing an MFI license from the Reserve Bank of India.
My focus today is to delve into the remarkable reach and impact of MML. With operations sprawling across 18 states and a network of 1,172 branches, the company employs over 10,000 dedicated staff members. Their mission transcends mere financial transactions, fostering entrepreneurship and nurturing self-sufficiency among rural women. The profound influence of MML’s strategy is clearly reflected in its vast borrower base, which has burgeoned to approximately 2.7 million women entrepreneurs.
In terms of financial magnitude, MML has amassed a remarkable portfolio size of ₹9,200 crore. This rapid growth has helped fortify their reputation as a catalyst for socio-economic development. MML’s innovative approach towards customer engagement is highlighted by introducing the Mahila Mitra app in 2021, designed to ease the repayment process for its beneficiaries.
MML is no stranger to savvy business maneuvers, either. The inception of their much-anticipated IPO comes on the heels of securing ₹284.99 crore from anchor investors, dispersing equity shares at a striking price point. This strategic fund acquisition speaks volumes about the confidence vested in MML by some of the market’s major players, such as Morgan Stanley Asia, WCM International, and HDFC Life Insurance.
Amidst the myriad financial options spawning in today’s market, MML’s IPO represents an intriguing opportunity. Its purpose-driven ethos and a firm financial foundation cast it as a pivotal player within microfinancing.
Muthoot Microfin IPO Review
As I’ve been following the developments of the Muthoot Microfin Limited (MML) IPO, it’s clear that this financial venture is poised to make significant ripples in the microfinancing sphere. With the IPO opening on December 18, 2023, there’s been a considerable buzz about its potential for investors.
I noted that the price band for the IPO ranges from INR 277 to INR 291 per share. Investors can bid for a minimum of 51 equity shares, which pegs the least investment amount for retail investors at INR 14,841. It’s worth highlighting that this aligns with MML’s customer-centric approach, providing an accessible entry point for smaller investors while catering to different investor classes with varied minimum lot size requirements.
The structured allotment suggests a keen insight into the dynamics of investor interest. 50% of the net offer is reserved for Qualified Institutional Buyers (QIBs), and a consequential 35% is allocated to retail investors. Such strategic reservation percentages underscore MML’s interest in creating a varied and balanced investor base.
A key metric that’s been fascinating to track is the Grey Market Premium (GMP). The GMP has been hovering around INR 90, indicating a substantial 30% increase above the upper band of the price band. This signals strong investor confidence and hints at robust post-listing performance.
From an operational standpoint, MML has earmarked the proceeds from the IPO to augment its capital base. This foresight to bolster capital for meeting future business and asset growth requirements speaks volumes about MML’s commitment to sustainable scaling.
Looking at the roster of experienced book runners, including ICICI Securities Limited, Axis Capital Limited, JM Financial Limited, and SBI Capital Markets Limited, it’s apparent that MML’s IPO has the backing of industry giants, infusing additional trust in the process. Moreover, Kfin Technologies Limited orchestrates the issue as the registrar, ensuring a streamlined and professional handling of the IPO proceedings.
For those considering participation, the IPO listing is set to happen on the BSE and NSE with a tentative date of December 26, 2023. With these credentials, it becomes quite evident why there’s heightened anticipation around Muthoot Microfin’s IPO.
Muthoot Microfin IPO Strengths and Weaknesses
When assessing the investment potential in the Muthoot Microfin Limited IPO, it’s crucial to weigh both the strengths and weaknesses that could impact its performance in the microfinance sector. I’ll walk you through a comprehensive analysis to ensure you’re well-informed.
Let’s delve into the strengths first:
Strong Financial Metrics are a definite plus for Muthoot Microfin, as the company boasts solid financial results. The company has shown impressive net margins and a remarkable Return on Equity (ROE).
Asset Quality is commendable, with low sweating of assets suggesting a focus on high growth potential. Coupled with a Robust Spread, crucial for financial intermediation, Muthoot Microfin stands on strong grounds.
The availability of the stock at a P/E Ratio of 24.96 times, based on the latest year’s diluted EPS of ₹11.66, signals a reasonable valuation when pitted against the peer group.
Here’s an insight into the company’s financial health:
|P/E Ratio Times
|Diluted EPS (₹)
|Promoter Holdings Pre-IPO
However, I also need to highlight the potential weak spots.
The company is not immune to Interest Rate Risks and changes in the interest rate could affect the net margins. Watchfulness is key as we consider how Muthoot Microfin adjusts to the Shift in Gross Loan Revenue Distribution, particularly with the South region’s decreasing contribution.
Promoter Holdings are set to change, from a current stake of 69.08% getting diluted down to 55.47% post-IPO, a factor that might influence future corporate actions and company guidance.
With these data points, monitoring the company’s maneuvers is crucial as it navigates the shifting market dynamics.
How to apply for Muthoot Microfin IPO
To apply for the Muthoot Microfin IPO in Zerodha, you can follow these steps:
- Log in to your Zerodha account on the Zerodha website or application.
- Go to the Portfolio section and click on IPO.
- Enter your bid on Kite, which is Zerodha’s trading platform.
- Accept the UPI mandate on your phone using any supported UPI app.
Additionally, you may need to create a UPI ID on a BHIM UPI app and link it to your Zerodha account to complete the application process. If you don’t have a Zerodha account, you must sign up for one before you can apply for the IPO through Zerodha.