The ₹960-crore IPO of Muthoot Microfinance was subscribed 2.83 times at the end of Day 2 on Tuesday. The issue, which comes at a price band of ₹277-291, will close today. Investors can bid for a minimum of 51 shares.

Against the offer size of 2.44 crore shares, it received bids for 6.90 crore shares.

Issue details

The offer comprises a fresh issue of ₹760 crore (2.61 crore shares) and an offer-for-sale (OFS) of ₹200 crore (0.69 crore shares). Investor shareholders including Greater Pacific Capital WIV, and promoters Thomas John Muthoot, Thomas Muthoot, Thomas George Muthoot, Preethi John Muthoot, Remmy Thomas, and Nina George are offloading their stake through OFS.

While the retail investors’ portion was subscribed 4.06 times, the non-institutional quota saw a bid for 3.12 times. The quota for QIBs is still undersubscribed at 0.46 times. However, employees are keenly participating in the IPO, as their portion was subscribed 2.87 times.

While 50 per cent of the offer is reserved for qualified institutional buyers, retail investors can subscribe up to 35 per cent and non-institutions 15 per cent. Muthoot Microfin has a reservation (worth ₹10 crore) for employees who will receive a discount of ₹14 a share to the final issue price.

Anchor investors

Muthoot Microfin, as part of IPO process, on Friday raised ₹285 crore from anchor investors.

The company has allocated 97,93,812 shares to 26 anchor investors at ₹291 a share. Among the investors included Morgan Stanley, Societe Generale, Copthall Mauritius Investment, ICICI Prudential Life Insurance, HDFC Life Insurance, Bajaj Allianz Life Insurance, Kotak Mahindra Life Insurance, and SBI General Life.

Utility of funds

The company plans to use the proceeds to augment its capital base to meet its future capital requirements, which are expected to arise out of the growth of Muthoot Microfin’s business and assets.

ICICI Securities Ltd, Axis Capital Ltd, JM Financial Ltd, and SBI Capital Markets Ltd are the book running lead managers of the Muthoot Microfin IPO, while Kfin Technologies is the registrar for the issue.

The Kochi-based microfinance institution has recorded a 246 per cent on-year growth in net profit at ₹163.9 crore for the year ended March FY23 and revenue zoomed 71.6 per cent to ₹1,428.8 crore.

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