Muthoot Finance Ltd

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3.45/5 from 51 Votes
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Muthoot Finance Limited provides gold and fixed investment, money transfer, insurance, securities, foreign exchange, vehicle, and asset finance services, as well as loans against gold. It is primarily in the business of lending against used household gold jewellery to individuals. Muthoot Finance's operating history has evolved over a period of 70 years since Mr M George Muthoot (the father of the present promoters) founded a gold loan business in 1939 under the trading business (under partnership firm) established by his father, Ninan Mathai Muthoot, in 1887. In 2001, Muthoot Finance received the NBFC licence from the RBI.


Headquartered in Kerala, Muthoot Finance Ltd is a non-deposit taking 'systemically important' non-banking finance company (NBFC) incorporated in 1997. The company was founded in 1887 and is based in Ernakulam, India with a zonal office in Chennai. Muthoot Finance Limited is a subsidiary of Muthoot Capital Services Ltd. It has the largest branch network among gold loan providers in India with 1,605 branches and a strong presence in the under-served rural and semi-urban markets. In 2010, it received a fund infusion of Rs 2.5 bn from private equity players like Baring India Private Equity, Matrix Partners India, Kotak India Private Equity Fund and Wellcome Trust for a 6% stake in the company. In 2011, Wellcome Trust picked up an additional 1% stake from the promoters, taking the total stake of private equity investors to 7%.


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Objects of the issue:

» To augment its capital base to meet future capital requirements to provide for funding of loans to its customers; and
» General corporate purposes. In addition, Company expects to receive the benefits of listing of the Equity Shares on the Stock Exchanges.

Company Address:

Address:
Muthoot Chambers,
Opposite Saritha Theatre Complex, 2nd Floor,
Banerji Road, Kochi 682 018, India
Phone:+91 484 239 4712
Fax:+91 484 239 6506
Email:investors@muthootfinance.com
Website:www.muthootfinance.com

IPO Details:

Information Value
Open Date18-Apr-2011
Close Date21-Apr-2011
Allotment Date02-May-2011
Refund Date03-May-2011
Listing Date06-May-2011
Issue PriceRs. 160 - Rs. 175
Isuue Type100% Book Building Issue
Issue Size51,500,000 Equity Shares of Rs. 10
Lot Size» Minimum : 40 Shares
» Maximum : 560 (1 Lac) , 1120 (2 Lac)
Max Amount for Retail Investor200000
Listing OnBSE,NSE
Lead ManagerIcici Securities Limited, Kotak Mahindra Capital Company Limited, Hdfc Bank Limited
RegistrarLink Intime India Private Limited
Registrar Emailmfl.ipo@linkintime.co.in
Registrar Websitewww.linkintime.co.in
Registrar Phone+91 22 2596 0320
Application Multiple40 and in multiples there off starting with atleast 40 shares
Cheque in Favour of"Escrow Account - MFL Public Issue - R" For Retail Bidders
Listing OpenRs. 180 / Rs. 196.60 (BSE/NSE)
Listing CloseRs. 176.25 / Rs. 175.90 (BSE/NSE)
Listing HighRs. 198 / Rs. 198.90 (BSE/NSE)
Listing LowRs. 161.50 / 161.40 (BSE/NSE)
Prospectus Download Download
Application Forms Download Download
ASBA E-Form Download Download
IPO Grading Download Download

Muthoot Finance Ltd Financial Details:

Muthoot Finance: Financials
Particulars 0603 (12) 0703 (12) 0803 (12) 0903 (12) 1003 (12) 1011 (08)
Interest Income 142.83 223.59 357.94 606.24 1077.45 1289.35
Interest Expense 64.82 99.90 179.80 309.77 473.73 582.56
Net Interest Income 78.01 123.69 178.14 296.47 603.72 706.79
Other Income 5.24 10.38 10.70 14.16 11.93 12.32
Net Total Income 83.25 134.07 188.84 310.63 615.65 719.11
Operating Expenses 38.52 60.02 84.45 152.59 255.21 267.49
Operating Profit 44.72 74.05 104.39 158.05 360.44 451.62
Depreciation 3.386 7.097 7.414 9.878 14.89 10.5
Profit before Tax 41.34 66.96 96.98 148.17 345.55 441.12
Provision for Tax 14.21 22.98 33.38 50.45 117.98 149.63
PAT 27.13 43.98 63.60 97.72 227.57 291.48
Net Adjustments 0.24 0.12 0.53 -0.15 -0.94 0.00
PAT as restated 26.89 43.86 63.07 97.87 228.52 291.48
EPS*(Rs) 0.7 1.2 1.7 2.6 6.1 11.8
* Annualised on post issue equity of Rs 371.71 crore, Face value Rs 10/- Figures in Rs crore

During FY06 to FY10, Muthoot Finance's AUM increased at a CAGR of 74% driven by the rise in pledged gold and a spurt in gold prices.


It reported gross AUM of Rs 74 bn and PAT of Rs 2.3 bn on a total income of Rs 11 bn in FY10. The average yield on the AUMs during the same period was 19.9%. In FY10, while asset quality remained strong with gross NPA of only 0.46%, the capitalisation level was comfortable with a capital adequacy ratio of 14.8%.

Gold Loan Portfolio outstanding of various financiers ( in Rs. crore)
Company FY'07 FY'09 FY'10 CAGR (%)
Muthoot Finance 1420 3300 7342 73
Muthoot Fincorp 470 1180 2220 68
Manappuram General Finance and Leasing Limited 480 1200 2560 75
Indian overseas bank 470 1180 2220 68
Indian Bank 1700 3250 3920 32
State Bank of Travancore 1140 1600 1930 19
Federal Bank 600 1070 860 13
Gold Loan Market Share (%)
FY'07 FY'09 FY'10
Muthoot Finance 11.0 13.4 19.5
Muthoot Fincorp 3.6 4.8 5.9
Manappuram General Finance and Leasing Limited 3.7 4.9 6.8
Indian overseas bank 13.1 12.6 13.9
Indian Bank 13.2 13.2 10.4
State Bank of Travancore 8.9 6.4 5.1
South Indian Bank 4.7 6.1 6.3
Federal Bank 4.7 4.3 2.3
Andhra Bank 3.1 3.6 3.7
Total Gold Loans (in Rs. crore) 12910.0 24630.0 37640.0
Muthoot Finance: Key Operating Ratios FY'08 FY'09 FY'10 8M FY'11
PAT Margin 17.1 15.8 21.0 22.4
Return on Average Equity (%) 33.9 34.1 48.3 51.0
Yield on Average Advances (%) 19.5 21.7 19.9 18.9*
NIM (%) 9.7 10.6 11.2 10.4
Gross NPA (%) 0.42 0.48 0.46 0.35
Net Worth ( in Rs. crore) 213.1 361.4 584.1 1131.4
Leverage 8.99 8.76 9.04 8.06

Muthoot Finance Ltd Grey Market Price - Premium - Rates

Warning: Do not subscribe to any IPO's on the basis of grey market price or IPO Forecast. Please check the fundamentals of the company before applying. Use grey market price as an information tool.

Date GM Premium Kostak Rate
13-Apr-2011----Rs. 2600 - 2800 (2 Lac)
15-Apr-2011Rs. 32 - 35Rs. 2600 - 2800 (2 Lac)
18-Apr-2011Rs. 26 - 27Rs. 2800 - 3000 (2 Lac)
19-Apr-2011Rs. 26 - 27Rs. 2800 - 3000 (2 Lac)
20-Apr-2011Rs. 21 - 22Rs. 2600 - 2700 (2 Lac)
21-Apr-2011Rs. 25 - 27Rs. 2700 - 2800 (2 Lac)
26-Apr-2011Rs. 26 - 27----
27-Apr-2011Rs. 25 - 27----
28-Apr-2011Rs. 26 - 27----
29-Apr-2011Rs. 28 - 30----
02-May-2011Rs. 28 - 29----
03-May-2011Rs. 27 - 29----
04-May-2011Rs. 32 - 33----
05-May-2011Rs. 32 - 33----

Muthoot Finance Ltd Subscription Details:

Date Retail QIB Non Institutional Employee Overall
18-Apr-20110.120.260.02NA0.16
19-Apr-20110.460.310.21NA0.35
20-Apr-20111.3425.010.98NA11.02
21-Apr-20118.5025.0160.94NA24.55

Muthoot Finance Ltd Basis of allotment:

Muthoot Finance Limited

Our Company was originally incorporated as a private limited company on March 14,1997 under the provisions of the Companies Act, 1956, with the name "The Muthoot Finance Private Limited". Subsequently, by a fresh certificate of incorporation dated May 16,2007, our name was changed to "Muthoot Finance Private Limited". Our Company was converted into a public limited company on November 18,2008 with the name "Muthoot Finance Limited" and received a fresh certificate of incorporation consequent to change in status on December 02,2008 from the Registrar of Companies, Kerala and Lakshadweep. For further details regarding changes to the name and registered office of our Company, see section titled "History and Certain Corporate Matters" on page 124 of the Prospectus.

Registered and Corporate Office: Muthoot Chambers, Opposite Saritha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682 018, India. Tel: (91 484) 239 4712; Fax: (91 484) 239 6506; Website: www.muthootfinance.com; Email: investors@muthootfinance.com. Company Secretary and Compliance Officer: Rajesh A.; Tel: (91484) 353 5533;
Fax: (91 484) 239 6506; E-mail: cs@muthootfinance.com

PROMOTERS: M.G. GEORGE MUTHOOT, GEORGE THOMAS MUTHOOT, GEORGE JACOB MUTHOOT AND GEORGE ALEXANDER MUTHOOT

BASIS OF ALLOTMENT

PUBLIC ISSUE OF 51,500,000 EQUITY SHARES OF FACE VALUE RS. 10 EACH (THE "EQUITY SHARE") FOR CASH AT A PRICE OF RS. 175 PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF RS. 165 PER EQUITY SHARE, AGGREGATING UP TO RS. 9,012.50 MILLION (THE "ISSUE") BY MUTHOOT FINANCE LIMITED (THE "COMPANY OR THE "ISSUER"). THE ISSUE WILL CONSTITUTE 13.85% OF THE FULLY DILUTED POST ISSUE PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.

THE ISSUE PRICE IS 17.5 TIMES THE FACE VALUE OF THE EQUITY SHARES.

The Company, in consultation with the BRLMs and CBRLM, has decided not to offer any discount on the Issue Price to Retail Individual Bidders.
The Equity Shares of the Company are proposed to be listed on the Bombay Stock Exchange Limited ("BSE") and the National Stock Exchange of India Limited ("NSE") and the trading will commence on May 06, 2011.

This Issue has been made for less than 25% of the post-Issue share capital pursuant to Rule 19(2)(b)(ii) of the Securities Contracts (Regulation) Rules, 1957, as amended, read with Regulations 26(1) and 41 (1) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended ("SEBIICDR Regulations"). Further, this Issue has been made through the Book Building Process wherein not more than 50% of the Issue was available for allocation to Qualified Institutional Buyers ("QIBs") on a proportionate basis out of which 5% of the QIB Portion (excluding the Anchor Investor Portion) was available for allocation on a proportionate basis to Mutual Funds only, and the remainder was available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 15% of the Issue was available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue was available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Our Company has allocated 30% of the QIB Portion to the Anchor Investors on a discretionary basis. One third of the Anchor Investor Portion was reserved for allocation to domestic Mutual Funds, subject to valid bids being received from domestic Mutual Funds at or above the Anchor Investor Issue Price. Bidders (except Anchor Investors) were allowed to participate in this Issue through the ASBA process by providing the details of the bank accounts in which the corresponding Bid Amounts had to be blocked by the SCSBs. For further details, see section titled "Issue Procedure" on page 336 of the Prospectus.
The Board of Directors of the Company wishes to thank all the investors for their response to the Issue, which opened for subscription on Monday, April 18,2011 and closed on Thursday, April 21,2011. The Anchor Investors Bidding date was April 15,2011.

The Issue received 265,018 applications for 1,078,895,200 equity shares resulting in 20.9494 times subscription. The details of the applications received in the Issue from Qualified Institutional Buyers, Non-Institutional, Retail Individual Investor and Anchor Investors are as under: (Before technical rejections)

Category No.of Applications No.of Shares No.of Times subscription
A Retail Individual Bidders 264269 151821320 8.4228
B Non Institutional Bidders 597 469072840 60.7214
C Qualified Institutional Bidders 137 449100480 24.9154
D Anchor Investors 15 8900560 1.1522
Total 265018 1078895200 20.9494

Final Demand
The final demand at different bid prices is as under:

Bid Price No.of equity Shares % to Total Cumulative Total Cumulative % to total
160 19,508,720 1.741 19,508,720 1.741
161 13,000 0.001 19,521,720 1.743
162 11,240 0.001 19,532,960 1.744
163 21,800 0.002 19,554,760 1.745
164 2,920 0.000 19,557,680 1.746
165 3,291,320 0.294 22,849,000 2.040
166 62,000 0.006 22,911,000 2.045
167 15,280 0.001 22,926,280 2.046
168 17,900,480 1.598 40,826,760 3.644
169 7,080 0.001 40,833,840 3.645
170 7,289,000 0.651 48,122,840 4.295
171 24,320 0.002 48,147,160 4.298
172 83,880 0.007 48,231,040 4.305
173 685,760 0.061 48,916,800 4.366
174 46.200 0.004 48,963,000 4.370
175 941,031,400 83.997 989,994,400 88.367
CUTOFF 130,323,800 11.633 1,120,318,200 100.000
TOTAL 1,120,318,200 100.000

The Basis of Allocation was finalized on May 02, 2011 in consultation with the Bombay Stock Exchange Limited ("BSE"), the Designated Stock Exchange for the issue.

A. Allocation to Retail Individual Investors (After Technical Rejections)
The Basis of Allocation to the Retail Individual Investors, who have bid at cut-off Price or at the Issue Price of Rs. 175 per Equity Share, was finalized in consultation with BSE. This category has been over subscribed to the extent of 8.3534 times. The total number of shares allotted in Retail Individual Investor category is 18,025,000 Equity Shares to 196,573 successful applicants.The category-wise details of the Basis of Allotment are (sample) as under:

Category No. of Applns. % to total Total No. of
Equity Shares applied
% to total No. of Equity
Shares allocated
Ratio Total No. of
Equity Shares allocated
40 29,286 11.27 1,171,440 0.78 40 11:94 137,080
80 20,916 8.05 1,673,280 1.11 40 17:71 200,320
120 15,596 6 1,871,520 1.24 40 32:89 224,320
160 7,681 2.96 1,228,960 0.82 40 23:48 147,200
200 11,256 4.33 2,251,200 1.5 40 58:97 269,200
240 4,139 1.59 993,360 0.66 40 23:32 119,000
280 9,948 3.83 2,785,440 1.85 40 31:37 333,400
320 3,584 1.38 1,146,880 0.76 40 23:24 137,400
360 1,682 0.65 605,520 0.4 43 1:1 72,326
400 6,080 2.34 2,432,000 1.62 48 1:1 291,840
440 1,353 0.52 595,320 0.4 53 1:1 71,709
680 707 0.27 480,760 0.32 81 1:1 57,267
720 860 0.33 619,200 0.41 86 1:1 73,960
760 380 0.15 288,800 0.19 91 1:1 34,580
800 1,614 0.62 1,291,200 0.86 96 1:1 154,944
920 356 0.14 327,520 0.22 110 1:1 39,160
960 379 0.15 363,840 0.24 115 1:1 43,585
1000 1,568 0.6 1,568,000 1.04 120 1:1 188,160
1120 85,954 33.09 96,268,480 63.94 134 1:1 11,517,836
1120 1 9:79 9,786

B. Allocation to Non Institutional Investors (After Technical Rejections)
The Basis of Allocation to the Non-Institutional Investors, who have bid at the Issue Price of Rs. 175 per Equity Share, was finalized in consultation with BSE. This category has been over subscribed to the extent of 60.6026 times. The total number of equity shares allotted in this category is 7,725,000 equity shares to 551 successful applicants. The category-wise details of the Basis of Allotment are (Sample) under

Category No. of Applns. % to total Total no. of
Equity Shares applied
% to total No. of Equity
Shares allocated
Ratio Total No. of
Equity Shares allocated
1160 19 3.24 22,040 0 40 8:19 320
1200 30 5.11 36,000 0.01 40 1:2 600
1240 1 0.17 1,240 0 40 1:1 40
1400 5 0.85 7,000 0 40 2:5 80
1520 1 0.17 1,520 0 40 1:1 40
1640 2 0.34 3,280 0 40 1:2 40
1680 3 0.51 5,040 0 40 2:3 80
1720 1 0.17 1,720 0 40 1:1 40
1800 3 0.51 5,400 0 40 2:3 80
1960 1 0.17 1,960 0 40 1:1 40
2000 12 2.04 24,000 0.01 40 2:3 320
2040 1 0.17 2,040 0 40 1:1 40
380000 1 0.17 380,000 0.08 6,270 1:1 6,270
628600 1 0.17 628,600 0.13 10,372 1:1 10,372
858000 1 0.17 858,000 0.18 14,158 1:1 14,158
860000 3 0.51 2,580,000 0.55 14,191 1:1 42,573
7142000 1 0.17 7,142,000 1.53 117,850 1:1 117,850
8900000 1 0.17 8,900,000 1.9 146,858 1:1 146,858
13171400 1 0.17 13,171,400 2.81 217,340 1:1 217,340
17142840 1 0.17 17,142,840 3.66 282,873 1:1 282,873

C. Allocation to QIBs
Allocation to QIBs has been done on a proportionate basis in consultation with BSE. As per the SEBI regulations, Mutual Funds were initially allocated 5% of the quantum of shares available (901,250 Equity Shares) and other QIBs were allocated the remaining available shares (17,123,750 Equity Shares) on proportionate basis.

Category Fls/Banks Flls MFs ICs Total
No. of Shares 2842361 11151845 3041566 989228 18025000

D. Allocation to Anchor Investors
Allocation to Anchor Investors has been done on a discretionary basis in consultation with BRLMs and CBRLM. As per the SEBI regulations, 30% of QIB Reservation (7,725,000 Equity Shares) was allocated to Anchor investors.

Category Flls MFs Total
No. of Shares 6855160 869840 7725000

The Board of Directors of the Company at it's Meeting held on May 03,2011, after taking on record the basis of allocation of shares approved by the Designated Stock Exchange viz., Bombay Stock Exchange Limited ("BSE"), Mumbai, of the Issue, has approved the allotment of equity shares and has authorized the Corporate Action for the credit of the shares to various successful applicants.
The CAN-cum-Refund Orders and allotment advice and/ or notices have been dispatched to the address of the investors as registered with the depositories. In case the same is not received within ten days, investors may contact at the address given below. The Refund Orders have been over-printed with the Bank Account details as registered, if any, with the depositories. The shares allotted to successful applicants are being credited to their beneficiary accounts subject to validation of the account details with the depositories concerned.
The Company filed the listing applications for Equity Shares with BSE and NSE on May 04,2011 and received the listing approvals from BSE and NSE on May 04,2011. The dispatch of refund orders, as applicable, has been completed on May 04,2011, the dispatch of allotment advice to the allottees will be completed on May 06,2011, and the refund instructions to the Clearing system / instruction to Self Certified Syndicate Banks were given on May 03,2011. The credit instructions to the Central Depository Services (India) Limited and the National Securities Depository Limited in respect of allotment of Equity Shares in dematerialized form was completed on May 04,2011. The Company received the trading approvals from BSE and NSE on May 04,2011 for dealing in the Equity Shares with effect from May 06,2011.

INVESTORS PLEASE NOTE
These details of the allocation made would be hosted on the website of Registrar to the Issue, Link Intime India Private Limited at their Website: www.linkintime.co.in

All future correspondence in this regard may kindly be addressed to the Registrar to the Issue quoting full name of the First/ Sole applicant, Serial number of the bid-cum-application form, number of shares bid for, name of the Member of the Syndicate and place where the bid was submitted and payment details at the address given below:

Link Intime India Private Limited

C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai 400 078
Tel.: +91 22 2596 0320, Fax: +91 22 2596 0329, Email ID: mfl.ipo@linkintime.co.in

Place: Kochi
Date : May 5,2011
For Muthoot Finance Limited
Sd/-
Mr. Rajesh A
Company Secretary and Compliance Officer

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARE ON LISTING OR THE BUSINESS PROSPECTS OF MUTHOOT FINANCE LIMITED.

Note: All capitalized terms used and not defined herein shall have the respective meanings assigned to them in the Prospectus MUTHOOT FINANCE LIMITED has filed a Prospectus with Registrar of Companies, Kerala and Lakshadweep. The Prospectus is available on SEBI website at www.sebi.gov.in as well as on the websites of Book Running Lead Managers at www.idcisecurities.com and www.kmcc.co.in and the Co-Book Running Lead Manager at www.hdfcbank.com. Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, see section titled "Risk Factors" of the Prospectus. This material is not an offer or sale of securities. The Shares of the Company are not being registered under the US Securities Act of 1933 and may not be offered or sold in the U.S. unless registered under the Securities Act of 1933 or pursuant to an exemption from registration. There will be no public share offering in the U.S.

Forecasts for Muthoot Finance Ltd

Please Note: Forecast or Predictions changes time to time according to market conditions. Do your homework before applying, Do not subscribe to any IPO's on the basis of grey market price or IPO Forecast. This is an informational tool for retail investors.

Type Forecast
Subscription» It can subscribe 10 to 16 times or more in the retail category.
» QIB & HNI category may subscribe more than 20 times.
Allotment» Retail investor (Rs. 2 lac ) should get 130 to 135 shares.
» Apart from Rs. 2 Lac Application, allotment will be lottery based.
Listing» It can list around Rs. 195 - 200.
» It may touch intraday levels of Rs. 215 - 220.




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