Muthoot Finance arm Belstar Microfinance files for Rs 1300 crore IPO

MUMBAI: Belstar Microfinance, an arm of the largest gold loan company Muthoot Finance, has filed the final documents (draft red herring prospectus) with the regulator Sebi for its initial share sale which seeks to raise up to Rs 1,300 crore.

Apart from lending to women self help groups under the microfinance model, the Chennai-based firm also offers loans to micro enterprises, small enterprises, funding consumer goods, and personal and education loans.

According to the DRHP, the issue comprises a fresh issue of shares each with a face value of Rs 10, aggregating up to Rs 1,000 crore and an offer for sale up to Rs 300 crore.

The company proposes to utilize the net proceeds from the fresh issue to meet future capital requirements towards onward lending estimated to be Rs 760 crore in FY 2025 and the balance towards general corporate purposes.

The shareholders participating in the OFS include MAJ Invest Financial Inclusion find (Rs 175 crore) upto Rs 97 crore by Arum Holdings and upto Rs 280 crore by Augusta Investments Zero. It’s not clear whether the promoter group led by Muthoot Finance is paring how much of their stake.

Earlier last fiscal, it can be noted that a rival family group controlled by Muthoot Fincorp owned Muthoot Microfinance had raised Rs 960 crore through an IPO.

According to a Crisil report, Belstar Microfinance is the ninth-largest microlender in terms of asset under management as of December 2023, 60 percent of which is microfinance book.

For the first nine months of FY24, its met profit stood at Rs 235 crore from a revenue of Rs 1,283 crore.

Total disbursement stood at Rs 6776 crore while the gross loan portfolio stood at Rs 8834.21 crore.

Its operations are spread across 279 districts in 20 states and has a little over 1,000 branches and close 10,170 employees serving around 2.67 million customers as of December 2023.