Muthoot Microfin plans to raise Rs 350 cr via share sale

Muthoot Microfin is planning to raise Rs 350 crore by selling shares during the current year, to fund business growth.

Besides, the microfinance arm of Muthoot Pappachan Group is also looking to raise Rs 100 crore from Tier-II bonds.

"We are looking to garner USD 50 million or about Rs 350 crore equity capital to grow and build balance sheet of the company," Muthoot Microfin Chief Executive Officer Sadaf Sayeed told PTI.

The fundraising would be through private placement to one or two investors towards December, he said.

Currently, the US-based investor Creation Investments holds 11.4 per cent stake in the company with one board position.

He further said the capital infusion will help the company not only bolster its balance sheet but also expand its reach.

The company is also looking to enter Uttarakhand, he said adding that the company has presence in 17 states and Union territories at present.

During the pandemic-hit period, the company hired over 2,300 employees as it opened as many as 64 new offices across different parts of the country.

The company is expecting its asset under management (AUM) to increase to Rs 6,500 crore by March 2022 and further rise to Rs 8,000 crore in the next financial year.

The company's AUM rose 6 per cent to Rs 5,227 crore from Rs 4,932 crore at the end of March 2020.

On the delinquency, he said the present wave and the consequent lockdown will have an impact on collection and there may be rise in non-performing assets (NPAs) on a temporary basis.

"Once the situation improves, the business and collection should be back to normal as we had experienced last year," he said.

Capital adequacy ratio of the microfinance institution stood at 26.75 per cent at the end of March 2021.

The company with a pre-dominant South India presence said it is currently the sixth-largest NBFC-MFI in the country and has over 19 lakh, woman entrepreneurs, as active customers.