Muthoot FinCorp plans a $300 million IPO with a mix of fresh shares and an offer for sale. The IPO comes amid strong gold loan growth but an uncertain market.
Key Highlights:
- Muthoot FinCorp plans an IPO to raise up to $300 million, with a mix of fresh shares and an offer for sale by existing investors.
- The company, part of the Muthoot Pappachan Group, is in discussions with investment bankers, with the appointment expected soon.
The company of Muthoot Pappachan Group, with its headquarters located in Kerala, is presently negotiating with investment bankers to advise on the planned sale of shares. Although the appointment of the bankers is yet to be formalized, it is likely to be done soon.
The IPO is expected to be a combination of fresh shares and an offer to sell by current investors, as indicated by the sources who are conversant with the issue. The listing may occur later in the year but the time may be adjusted according to the market conditions.
Muthoot FinCorp was established in 1997, with its main operations being gold-backed loans which have now been extended to secured and unsecured loans to micro, small and medium businesses (MSME). The company has more than 3,700 branches in India and has a workforce of more than 23,000.
The IPO plans are made at a time when Gold loans have emerged as a fast expanding market in the Indian retail credit market, since gold prices are increasing and short term liquidity sought by customers has been on the increase.
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But the markets in general have just become cautious, with a sharp correction of equities crushing investor confidence. The IPO of Walmart-supported PhonePe being delayed is also an indicator of the difficulties in the existing market volatility.
The IPO of Muthoot FinCorp will offer a significant indication of how investors feel about the financial sector in India in the months ahead.
