Muthoot Microfin IPO listed; envisages big plans for development

Muthoot Microfin IPO listed; envisages big plans for development

Muthoot Microfin, a part of the Muthoot Pappachan Group (Blue Muthoot), which ventured into the stock market on the day after Christmas, envisages extensive projects for development. 

The IPO of Muthoot Microfin which was launched on December 18 had witnessed a big interest from investors and it was oversubscribed by 11.52 times. While the issue price was Rs 291, the expectations were not fully met during the IPO listing, when the price fell by five per cent to Rs 278. The trade is currently taking place at Rs 264.75. Despite this fluctuation, Muthoot Microfin promises big plans for expansion.

The main focus of the company is to serve more customers by expanding its branches. At present, the firm has a presence in 18 states with 1,340 branches. The plan is to utilize the latest technology to offer faster and better customer service. IT will also enable the company to increase productivity and control expenses.

“Muthoot Microfin registered a half-yearly profit of Rs 205 crore in September. The current yield from investments is 22.94 per cent and the net interest is nearly 12.34 per cent,” said Chief Executive Officer (CEO) of the company Sadaf Sayeed.

With the Reserve Bank of India expected to slash rates in the near future, the margin of interest rates would be wider, he added. The benefits in this regard would be passed on to customers, the CEO said.

A leading player in the microfinance sector in Kerala and Tamil Nadu, the company has a wide presence in other southern states. There are 32 lakh customers for the firm, which manages assets worth Rs 10,800 crore and the income is Rs 1428 crore. A major share of the customers is located in rural areas and most of them are women. 

Muthoot Pappachan Group, established over 50 years ago, has another company which was listed on the stock exchange earlier – Muthoot Fincorp Limited.

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