Muthoot Microfin Limited

About  Muthoot Microfin Limited

Incorporated in 1992, Muthoot Microfin Limited provides micro-loans to women customers (primarily for income generation purposes) with a focus on rural regions of India. The company has a major presence in southern states of India. As of 31 March 2023, it is the fifth largest NBFC-MFI (Non-Banking Financial Company - Micro Finance Institution) in India in terms of the gross loan portfolio.

As of 30 September 2023, the company has 3.19 million active customers served by 12,297 employees. It is present in 339 districts in 18 states and union territories in India with its network of 1,340 branches. It emphasises on the under-served rural markets which have growth potential as well as in order to ensure ease of access to customers. 

It is part of the Muthoot Pappachan Group, a business conglomerate with presence across financial services, automotive, hospitality, real estate, information technology infrastructure, precious metals and alternate energy sectors and a history of over 50 years in the financial services business.

The company’s loan products comprise income generating loans such as group loans, Pragathi loans (interim loans for existing customers), individual loans and Suvidha loans (digitally accessible). It also offers life betterment solutions such as mobile phone loans, solar lighting product loans etc, health and hygiene loans such as sanitation improvement loans, and secured loans in the form of gold loans and Muthoot Small & Growing Business (MSGB) loans. 

It significantly incorporates the use of technology in its operations so that 20% of its repayments were collected on a digital basis in FY23 and 2.46 million customers have transacted digitally via its Mahila Mitra application and other digital payment methods as of 30 September 2023. It has also received multiple awards for the same. 

To provide digital healthcare facilities, it collaborates with M-Swasth Solutions and has set up  460 e-clinics across 460 of its branches as of 30 September 2023. 14% of its customers have enrolled in these e-clinics and have facilitated 98,844 medical consultations and 65,878 teleconsultations. It also provides natural calamity insurance to its customers and has done so for 23% of its clients as of 30 September 2023. 

The company’s gross loan portfolio stands at ₹10,867 crore as of 30 September 2023 which has seen a CAGR rise of over 22% between FY21 and FY23. During the same period, its net profit rose at a CAGR of 186%. Moreover, the MFI industry is expected to grow at a CAGR of 18%-22% between FY23 and FY25. NBFC-MFIs especially, are expected to grow at a much faster rate of 25%-30% compared with the MFI industry. All of this could be beneficial for the company. 

And now, Muthoot Microfin Limited is coming out with its initial public offer (IPO). The IPO will be an offer for sale as well as a fresh issue. The money raised through the fresh issue will be utilised to augment the capital base of the company. Its shares will be listed on the NSE and the BSE.

   Here are key details about the Muthoot Microfin Limited IPO:

Financial snapshot

Here’s a quick look at Muthoot Microfin Limited IPO’s strengths, weakness, opportunities and risks (SWOT analysis)

Strengths and opportunities

1. Market leadership with a pan-India presence as it has expanded its operations in the North, East and West India in the past five years. 
2. Rural focused operations, with a commitment towards health and social welfare of customers through the provision of e-clinics and natural calamity insurance. 
3. Brand recall and synergies with the Muthoot Pappachan Group which serves  8.7 million unique customers as of 30 September 2023. 
4. Robust risk management framework as it had the third lowest net NPA (Non-Performing Asset) ratio of 0.33% among the selected NBFC-MFIs as of 30 September 2023 along with a collection efficiency of 95% in FY23.
5. Streamlined operating model with effective use of technology and an information technology team of 102 members as of 30 September 2023. 
6. Access to diversified sources of capital such as  public sector banks, private sector banks, small finance banks, foreign banks, other non-banking financial institutions, developmental financial institutions and public investors.

Risks and threats

1. Operates in a risky industry as the customer segment has limited sources of income, savings and credit histories.
2. Vulnerable to interest rate risks as interest income is its primary revenue source. 
3. Holds debt securities amassing to ₹1,435 crore and debt borrowings amassing to ₹6,310 crore as of 30 September 2023. 
4. Has experienced negative cash flows from operating and investing activities consecutively in the last three years. 
5. Derives a significant portion of its revenue from South India making up 66%, 64% and 55% of its gross loan portfolio in FY21, FY22 and FY23 respectively.

Muthoot Microfin Limited IPO details

|Muthoot Microfin Limited IPO date

According to the offer document filed by the company with the SEBI, the Muthoot Microfin IPOs opening date – in other words, the Muthoot Microfin IPO launch date – will be 18th December 2023. The Muthoot Microfin IPO closing date is 20th December 2023. After this, investors will be updated about the allotment status on 21st December 2023.

Investors, who have been allotted shares, can expect them to be credited to their demat account on 22nd December 2023. The Muthoot Microfin IPO listing date is 26th December 2023. The listing date is the date on which the shares of a company get listed on the bourses – NSE and BSE. 

|Muthoot Microfin Limited IPO Price Band

The IPO is an offer for sale as well as a fresh issue. The Muthoot Microfin IPO price band has been set between ₹277 and ₹291 per share. Interested investors can choose a price within this band to apply for the IPO. 

The Muthoot Microfin IPO listing price will be determined on 26th December 2023. The listing price is the price at which a company’s shares debut on the stock exchanges.

|Muthoot Microfin Limited IPO Lot size

The Muthoot Microfin IPO details have been declared. The Muthoot Microfin IPO lot size is set at 51 shares and an investor can apply for a minimum of 1 lot. Meanwhile, the Muthoot Microfin IPO issue size is approx ₹960 crore. 

How to pre-apply for the Muthoot Microfin Limited IPO?

You can pre-apply for the Muthoot Microfin Limited IPO on Upstox. The pre-application for this IPO, which means pre-apply open date, usually begins a day before the IPO opens for subscription. 

Follow these steps to pre-apply for the IPO: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Muthoot Microfin Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Pre-Apply’
7. Accept the mandate on your UPI app

How to apply for the Muthoot Microfin Limited IPO?

If you are interested in this investment opportunity but unsure how to apply for the Muthoot Microfin Limited IPO, here we are listing out the steps for you. 

When the public issue opens for subscription, one can follow this step-by-step guide on how to apply for the Muthoot Microfin Limited IPO on Upstox: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Muthoot Microfin Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

How to check the Muthoot Microfin LimitedIPO allotment status?

When the allotment process is completed, you can check the status of your application on the Upstox app. Share allotment is generally done around five to six days after an IPO closes. 

Here’s a step-by-step guide on how to check the Muthoot Microfin Limited IPO allotment status:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover page, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, you will find the ‘View all’ option
5. Once you click on ‘View all’, you will be directed to the ‘IPO’ tab
6. In the ‘IPO’ tab, click on ‘My applications’ 
7. In ‘My applications’, under the History section, your Muthoot Microfin Limited IPO allotment status will be mentioned

Check Allotment Status

Open a demat account with Upstox to apply for the Muthoot Microfin Limited IPO

To apply for the Muthoot Microfin Limited IPO, you need to mandatorily have a demat account. A demat account helps you hold the shares you buy in a dematerialised format. If you don’t have a demat account yet, you can open one with Upstox by visiting our website or by downloading the app.

Here is a step-by-step guide on how to open a demat account with Upstox:

1. Click here to visit the demat account opening page on the Upstox website. 
2. Enter your phone number and other essential details to begin opening a demat account.
3. Upload the scanned copies of your PAN, Aadhaar card, a cancelled cheque, and your bank statement as needed. 
4. Complete the e-verification using the OTP sent to your registered mobile number. 

This is all it takes to open a demat account with Upstox. Easy and quick, right? 

Open Demat Account

Upstox – trading app to apply for the Muthoot Microfin Limited IPO

Applying for IPOs with Upstox is extremely easy. The user-friendly interface and top-notch security make Upstox one of the leading trading apps in India.

You can apply for the Muthoot Microfin Limited IPO on Upstox, provided you have a demat account. As mentioned in the previous section, you can simply follow the steps to open a demat account with Upstox. The biggest advantage is that when you apply for an IPO using your Upstox account, the brokerage charges are zero.

In fact, courtesy of its robust features and minimal charges, Upstox is among the most preferred trading apps. Lakhs of Indians trust Upstox as it is a reliable trading platform that makes IPO applications easy.