Matrix Partners India has put in an additional Rs 25 crore in Kerala-based NBFC Muthoot Finance Limited after co-investing Rs 78.5 crore each with Baring Private Equity Partners India in July this year. This was part of yet another round of pre-IPO transactions where Muthoot also raised Rs 30 crore from UK’s Wellcome Trust besides a separate deal where promoters of the company have agreed to sell another chunk of shares representing around 1% of pre-issue capital for Rs 55 crore to Wellcome Trust.
This takes the total sum raised by Muthoot from private equity firms to Rs 255 crore over the last three months. The last transaction was at a price of Rs 173 a share which values the firm post issue at Rs 6,430 crore or $1.45 billion.
The company has not indicated its fund requirement but if the last transaction price is a benchmark then the company will be able to raise around Rs 891 crore through the public float. Muthoot intends to use the issue proceeds to augment its capital base to meet future capital requirements for funding of loans.
Muthoot has said in its draft prospectus that the company may yet again go for another round of pre-IPO sales of shares of up to 14.1 million at a price not less than Rs 123 (the price at which it sold shares to Matrix, Kotak and Baring).
Matrix Partners owns 2.45%, Baring - 2%, Kotak - 1% and Wellcome - 0.55% (before pending share purchase from promoters) ahead of the public issue.
Muthoot Finance, that claims to be the largest gold loan company in India in terms of loan portfolio, provides personal and business loans secured by gold jewellery. It primarily caters to individuals who possess gold jewellery but could not access formal credit within a reasonable time, or to whom credit may not be available at all, to meet short-term liquidity requirements.
As of August 31, 2010 its network stood at 1,921 branches across India employing 12,220 persons. The gold loan business was started by M George Muthoot in 1939 under the group’s trading business of Gold Loans. In addition to gold loans, it also provides money transfer services through its branches as sub-agents of various registered money transfer agencies, and recently has commenced providing collection agency services. The firm also operates three wind mills in Tamil Nadu.
Its total income for the year ended March’10 was Rs 1,089.37 crore with net profit of Rs 227.57 crore. Its net worth has grown from Rs 213.1 crore as of March 31, 2008 to Rs 584.2 crore for the year ended March’10.