Motilal Oswal Financial Services Ltd and a unit will invest a total of Rs 135 crore ($20.8 million) in Ahmedabad-based non-banking financial company (NBFC) MAS Financial Services Ltd.
Motilal Oswal Financial said in a stock-exchange filing that MAS Financial Services has allotted shares worth Rs 80 crore to the company and shares valued at Rs 20 crore to Motilal Oswal Securities Ltd. The NBFC will allot shares worth the remaining Rs 35 crore to Motilal Oswal Securities by the end of April, it said.
Motilal Oswal Financial and its unit will acquire a 9.07% stake in MAS Financial Services after the transaction is completed. The stake will subsequently be transferred to MOPE Investment Advisors Pvt. Ltd, the group’s private equity arm.
After the pre-initial public offering (IPO) round, MOPE would have consolidated holding of 3.9 million shares for Rs 338.31 per share for both tranches in the company.
The pre-IPO round values the company at Rs 1,353 crore (around $208.6 million).
The IPO will result in a 20-25% stake dilution and would value the company at Rs 2,200-2,750 crore ($338-422.42 million).
The company, formerly known as M/S Marketing & Allied Services, filed a draft red herring prospectus with capital markets regulator Securities and Exchange Board of India (SEBI) for a public issue on Friday.
VCCircle was first to report in September 2016 that MAS Financial Services was finalising plans to take the IPO route, following the footsteps of several banking, financial services and insurance companies that have either gone public or firmed up IPO plans in the last one year.
The company is looking to raise Rs 550 crore ($84.5 million) through a combination of sale of fresh equity and an offer for sale by existing venture capital investor Sarva Capital and strategic investors.
The public issue will comprise a fresh issue of shares worth Rs 307.4 crore ($47.2 million) besides an offer for sale worth Rs 242.6 crore by Sarva Capital as well as international development finance institutions DEG and FMO.
Motilal Oswal Investment Advisors Pvt. Ltd is the sole financial adviser to MAS Financial Services for the IPO.
MAS Financial Services
The company, which has been in business for close to two decades and has a presence in six states, will look to deploy the capital raised over FY2017-18 and FY2018-19. The IPO will also help the firm augment its capital base to meet requirements under capital adequacy norms. Under the Reserve Bank of India’s (RBI) capital adequacy regulations, NBFCs must have a capital to risk assets ratio (CRAR) of 15%.
As of September 2016, the company had a net worth of Rs 215.84 crore. It reported a total income of Rs 177.40 crore in FY2013-14, Rs 225.91 crore in FY2014-15, Rs 293.91 crore in FY2015-16.
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