Muthoot Microfinance to bid for IPO

The initial public offering of Muthoot Microfinance Limited has raised Rs284.99 crore from anchor investors . The microfinance company raised this money by allocating 97,93,812 equity shares at the upper price band of Rs291per equity share to 26 anchor investors.

The Muthoot Microfinance Limited will open for bidding on Monday next week and it will remain open till 20 December 2023. Key anchor investors include , Morgan Stanley Asia [ Singapore] Pte, WCM International , JNL Multi Manager International , Clearwater International, ICICI Prudential Life Insurance, HDFC Life Insurance, Bajaj Alliance Life Insurance , Muthoot Finance Limited, SBI General Insurance , Kotak Mahindra Life Insurance, ICICI Lombard General Insurance and Reliance General Insurance.

As per the Securities and Exchange Board of India or SEBI[ Issue of Capital and Disclosure Requirement] regulation , 2018, as amended, in case of offer price discovered through book building process is higher than the Anchor Investor allocation price. Anchor Investors will be required to pay the difference by the Anchor Investors pay-in date , as specified in revised CAN.

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The Public issue will open for subscription on 18th December 2023 i.e. on Monday next week. It will remain open for bidding till 20th December 2023. The company has fixed Muthoot Microfinance IPO price band at Rs227 to Rs291 per equity share and it aims to raise Rs 960 crore from its public issue. The IPO comprises a fresh release of shares valued at Rs760 crore by the microfinance institution , coupled with an offer-for-sale [OFS] of Rs200 crore worth of shares by existing shareholders.

Additionally, Muthoot Microfinance has earmarked shares worth Rs10 crore for its employees, who may have the opportunity to acquire these shares at a discounted rate compared to the final issue price. TThe net issue proceeds from the offering will primarily be allocated to bolstering its capital base , ensuring sufficient resources to meet future capital demands.

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The company is being categorised as NBFC-MFI, the organization is mandated to uphold a minimum Capital to Risk Weighted Assets Ratio [CRAR] of 15 percent , encompassing both Tier I and Tier II Capital. As of March FY23, its CRAR registered at 21.87 percent [ amounting to Rs1,363.8 crore], and as of September FY24, it was at 20.46 percent[equivalent to Rs1,540.3 crore]. 

It will finalise the basis of IPO share allotment by December 21, with the allocation of equity shares to eligible investors' demat accounts scheduled for December 22.

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