Belstar Microfinance Ltd, a subsidiary of Muthoot Finance Ltd, will be receiving primary equity infusion aggregating ₹110 crore from Augusta Investments Zero PTE Ltd and Arum Holdings Ltd.

Augusta Investments Zero PTE Ltd will pick up 4.52 per cent stake by investing ₹75 crore in Belstar Microfinance.

Arum Holdings will up its stake in the microfinance company from 14.51 per cent to 15.66 per cent by investing ₹35 crore, per a regulatory filing by Muthoot Finance (MFL).

Shareholders’ agreement and share subscription agreement was executed on May 30, 2022, between Belstar Microfinance Ltd, Promoters of Belstar Microfinance Ltd, Augusta Investments IV PTE Ltd, Arum Holdings Ltd, MAJ Invest Financial Inclusion Fund II K/S, Augusta Investments Zero PTE Ltd and Muthoot Finance Ltd, according to the filing.

The indicative time period for completion of the transaction is three months.

Post completion of primary issuance, the shareholding of Promoter & Promoter Group in Belstar Microfinance will come down to 13.34 per cent (14.29 per cent pre-transaction shareholding as on May 30, 2022).

The shareholding of MFL and MAJ Invest Financial Inclusion Fund II K/S will come down to 56.67 per cent (60.69 per cent) and 9.81 per cent (10.51 per cent), respecively.

According to a May 26th MFL statement, Belstar increased its loan portfolio to ₹4,366 crore as against last year of ₹3,300 crore, a year-on-year (y-o-y) increase of 32 per cent. During Q4 FY22, loan portfolio increased by ₹530 crore.

Belstar posted a net profit of ₹47 crore and ₹45 crores in FY21 and FY22 respectively, MFL said.

Stage III (credit impaired) assets as a percentage of gross loan assets stood at 5.73 per cent as of March 31, 2022 as compared to 2.37 per cent as of March 31, 2021, it added.

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