Muthoot Microfin IPO Date, Price, Lot Size, GMP Details and Review

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The initial public offering (IPO) of Muthoot Microfin, a prominent microfinance institution, is a significant event in the financial sector. This Muthoot Microfin IPO comprises a fresh issuance of 2.61 crore shares, totaling ₹760 crores, coupled with an offer for sale of 0.69 crore shares, amounting to ₹200 crores, bringing the total issue size to ₹960 crores.

Muthoot Microfin IPO Date, Price, Lot Size, GMP Details and Review
Muthoot Microfin IPO Date, Price, Lot Size, GMP Details and Review

Subscriptions for the Muthoot Microfin IPO will open on December 18, 2023, and close on December 20, 2023. The anticipated date for allotment confirmation is December 21, 2023, with the company expected to make its market debut on BSE and NSE on December 26, 2023.

Investors should note the Muthoot Microfin IPO price range, set between ₹277 to ₹291 per share. Retail investors can bid for a minimum of 51 shares, equating to an investment of ₹14,841. For strategic non-institutional investors (sNII), the minimum bid is for 14 lots (714 shares), totaling ₹207,774, while big non-institutional investors (bNII) must bid for at least 68 lots (3,468 shares), amounting to ₹1,009,188.

The IPO is managed by notable lead managers: ICICI Securities Limited, Axis Capital Limited, Jm Financial Limited, and SBI Capital Markets Limited. Kfin Technologies Limited is appointed as the registrar for the issue.

As per the ongoing Muthoot Microfin IPO GMP, The expected Muthoot Microfin IPO Listing Price is between ₹380 and ₹400 per share.

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Muthoot Microfin IPO Details

IPO DateDecember 18, 2023 to December 20, 2023
Listing DateDecember 26, 2023
Face Value₹10 per share
Price Band₹277 to ₹291 per share
Lot Size51 Shares
Total Issue Size32,989,690 shares
(aggregating up to ₹960.00 Cr)
Fresh Issue26,116,838 shares
(aggregating up to ₹760.00 Cr)
Offer for Sale6,872,852 shares of ₹10
(aggregating up to ₹200.00 Cr)
Employee DiscountRs 14 per share
Issue TypeBook Built Issue IPO
Listing AtBSE, NSE
Share holding pre issue116,837,249
Share holding post issue142,954,087
Muthoot Microfin IPO Details

Muthoot Microfin IPO Dates

IPO Open DateMonday, December 18, 2023
IPO Close DateWednesday, December 20, 2023
Basis of AllotmentThursday, December 21, 2023
Initiation of RefundsFriday, December 22, 2023
Credit of Shares to DematFriday, December 22, 2023
Listing DateTuesday, December 26, 2023
Cut-off time for UPI mandate confirmation5 PM on December 20, 2023
Muthoot Microfin IPO Dates

Muthoot Microfin IPO Lot Size

Investor TypeApplication LotsShares (Min)Amount (Min)
Retail (Min)151₹14,841
Retail (Max)13663₹192,933
S-HNI (Min)14714₹207,774
S-HNI (Max)673,417₹994,347
B-HNI (Min)683,468₹1,009,188
Muthoot Microfin IPO Lot Size

Consider reading: How to Check IPO Allotment Status

Muthoot Microfin IPO GMP

GMP DateMuthoot Microfin IPO GMP
Muthoot Microfin IPO GMP

Muthoot Microfin IPO Listing Price

The expected Muthoot Microfin IPO Listing Price is between ₹380 and ₹400 per share.

Muthoot Microfin Limited Company Overview

Muthoot Microfin Limited, established in April 1992 as a vital arm of the Muthoot Pappachan Group, is a distinguished financial entity specializing in microfinance, with a strong commitment to empowering women in rural India. The company’s offerings are tailored to enhance the lives of its female customers through various financial solutions.

Diverse Financial Services:

  1. Group Loans: These include income-generating loans and Pragathi loans, designed to provide essential working capital and support income-generating activities, along with individual loans for personal and business needs.
  2. Life Betterment Solutions: Offering loans for essential modern amenities such as cell phones, solar lights, and household appliances, thereby elevating the standard of living for its clients.
  3. Health and Hygiene Loans: Dedicated to improving sanitation facilities, showcasing Muthoot Microfin’s focus on the overall well-being of its customers.
  4. Secured Loans: Comprising gold loans and Muthoot Small & Growing Business (MSGB) loans, catering to the needs of small business owners and entrepreneurs.

Innovative Digital Initiatives: In 2021, Muthoot Microfin launched the “Mahila Mitra” mobile application, a significant stride in digital financial services. This app allows customers to use diverse digital payment methods like QR codes, websites, SMS-based links, and voice-based payments, demonstrating Muthoot Microfin’s commitment to technological innovation and customer convenience.

Extensive Customer Base and Reach: As of March 31, 2023, Muthoot Microfin boasts an impressive customer base of 2.77 million active clients, supported by a robust network of 1,172 branches across 321 districts in 18 states and union territories in India. The company’s workforce of 10,227 employees underpins its extensive operations, ensuring a widespread impact across the nation.

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Muthoot Microfin Limited Financials

The financial data for Muthoot Microfin Limited, presented in a restated format, showcases a remarkable growth trajectory between the financial years ending March 31, 2021, and March 31, 2023.

Financial Metric31 Mar 202331 Mar 202231 Mar 2021
Profit After Tax163.8947.47.05
Net Worth1,625.851,336.58889.89
Reserves and Surplus1,282.151,040.10642.84
Total Borrowing6,493.183,996.613,015.66
Muthoot Microfin Limited Financials

This growth is evident in several key financial metrics.

Growth Highlights:

  1. Revenue Increase: There’s a significant 71.58% increase in revenue, rising from ₹842.94 crores in the financial year ending March 31, 2022, to ₹1,446.34 crores by March 31, 2023.
  2. Profit After Tax (PAT): The PAT witnessed an exceptional surge of 245.77%, escalating from ₹47.40 crores in 2022 to ₹163.89 crores in 2023.

Muthoot Microfin IPO Review and Recommendation

Key Advantages of Muthoot Microfin IPO:

  1. Dominant Market Position: Muthoot Microfin, as per the December 2022 CRISIL Report, stands as India’s fourth-largest NBFC-MFI in terms of gross loan portfolio. The company leads in Kerala and ranks third in South India, with an impressive 16% market share in Tamil Nadu. Its diversified offerings, strong customer base, and consistent growth underscore its market dominance.
  2. Promising Sector Growth: Forecasts indicate a 20% CAGR growth for the microfinance sector from FY21 to FY26. Muthoot Microfin, catering to women with informal income documents, is ideally positioned to leverage this growth. The company’s association with the Muthoot Pappachan Group further enhances its market potential.
  3. Attractive Valuation: Priced at a P/E multiple of 19.6x for FY23 earnings, the Muthoot Microfin IPO stands below the industry average of 22.8x. It offers a 10% discount to retail investors and employees. Market experts and analysts have given positive reviews, highlighting its valuation and potential investor interest.

Muthoot Microfin IPO Considerations:

  1. Industry Cyclicality: The microfinance sector’s performance is tied to macroeconomic factors, consumer preferences, and regulatory changes. These elements could impact Muthoot Microfin’s loan disbursements and profitability.
  2. Regulatory Challenges: Compliance with Indian regulations like the RBI Act and the Micro Finance Institutions Bill is crucial for Muthoot Microfin. Changes in these regulations could impact its operations.
  3. Credit Risks: The company’s loan portfolio faces default risks, which may lead to increased provisioning and asset quality concerns. Its NPA ratio witnessed a slight increase from 0.99% in March 2021 to 1.23% in September 2023.
  4. Market Competition: Muthoot Microfin competes with major industry players and informal credit sources. Market share and customer retention could be at risk if the company doesn’t maintain its service quality and innovation.

Muthoot Microfin IPO Final Verdict: Muthoot Microfin’s IPO presents an investment opportunity in a strong market player with a solid track record and diversified portfolio. While the IPO draws attention for its favorable valuation and market potential, investors should carefully weigh the associated industry risks and regulatory challenges. It’s advisable to review the red herring prospectus and seek financial advice before investing.

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Closing Thoughts on Muthoot Microfin IPO Date, Price, Lot Size, GMP

The Muthoot Microfin IPO presents an attractive investment opportunity for investors who are looking for a long-term exposure to the microfinance segment, which is expected to grow at a CAGR of 20% from FY21 to FY26. The company has a strong market position, a diversified product portfolio, a robust order book, a loyal customer base, and a proven track record of growth and profitability.

The company also has a scalable technology infrastructure, an extensive distribution network, and a healthy credit rating. The Muthoot Microfin IPO is priced at a P/E multiple of 19.6x based on the FY23 earnings, which is lower than the industry average of 22.8x. The IPO also offers a discount of 10% to the retail investors and the eligible employees.

However, the investors should also be aware of the risks involved in investing in the IPO, such as the cyclical nature of the industry, the regulatory uncertainties, the credit risk and asset quality, and the competition and customer concentration. The investors should also read the red herring prospectus carefully and consult their financial advisor before making any decision.

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