Muthoot Pappachan Group may consider Muthoot FinCorp IPO in three years

Illustration: Ajay Mohanty
Kerala-based Muthoot Pappachan Group, which has diversified businesses including financial services, is expecting two Initial Public Offerings (IPOs) in the next three years including the listing of its flagship Non-Banking Finance Company (NBFC) Muthoot FinCorp Ltd. The company is expected to launch IPO for Muthoot Microfin during 2019 as the Sebi mandate is to list it before September-October, this year, said Thomas John Muthoot, Chairman & Managing Director, Muthoot Pappachan Group.


"What we are planning in the next three years, it (Muthoot FinCorp) should be listing. It is all in a very early stage to speak more about it right now," said Muthoot. He added that the group also has a Sebi card for Muthoot MicroFin IPO to hit the market. "We have the Sebi Card for the IPO of the microfinance with a validity of one year from last October. We have not decided when, and waiting for the market to be better," he said, after launching the first financial product of Muthoot Pappachan Chits (India) Pvt Ltd (MPCIPL), the chit fund business, the company re-entered a few years back.


The company is planning to expand its chit fund business in Kerala, Karnataka and Tamil Nadu in the near future, with plans to reach a size of Rs 1,000 crore chit value (if the customer joins a chit scheme of Rs 5 lakh, that is the chit value) from the three southern states in 2019-2020. Chit, being the first financial product of the group, it has exited the business in the 1980s owing to regulatory challenges. The group started its first chit fund in the year 1939. With various regulatory measures making the business feasible later, the group relaunched their chit business in a new form by incorporating a new company, named Muthoot Pappachan Chits (India) Pvt Ltd in the year 2012.


The group's overall growth was expected to be around 22-25 per cent this year, but with the IL&FS crisis in the second half of the fiscal, the growth projections have also been changed and the company is expecting around 16-18 per cent growth during this year, said Muthoot. He added that if the conditions are good, the company will expect better growth in the next fiscal year.


Muthoot FinCorp Ltd has posted gross revenue of Rs 2108.87 crore during the year 2017-18 with an increase of 7.45 per cent compared to the previous year, as per the company's annual report. PAT was at Rs 151.53 crore, with an increase of 30.55 per cent. The AUM was at around Rs 11,444.60 crore, according to the report.


According to reports last year, the microfinance company, which has its presence in the southern market, is expected to go for an IPO size of Rs 800-1000 crore, including a fresh issue to fund its expansion. As on March 31, 2018, the company had 467 branches, apart from the branches of Muthoot FinCorp. During the year ended March 2018, the microfinance company had total revenue of Rs 459.4 crore as compared to Rs 243.8 crore during the same period of the previous year. The net profit was at Rs 76 crore, as compared to Rs 37.1 crore during the previous year, according to the group's annual report for 2017-18.

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