The Muthoot Microfin Limited’s initial public offering (IPO) is creating waves in the financial market, opening its subscription window from Monday, December 18, 2023, to Wednesday, December 20, 2023. During this period, investors have the opportunity to apply for shares in lots, with each lot comprising 51 equity shares.
Grey Market Buzz
Before delving into the nitty-gritty of the IPO, it’s crucial to note that the shares of Muthoot Microfin Limited are currently trading at a premium of ₹82 in the grey market. This market sentiment serves as an early indicator of the potential demand for the IPO.
IPO Price Band and Size
Muthoot Microfin has fixed the price band for its IPO at ₹277 to ₹291 per equity share. The company aims to raise a substantial ₹960 crore through this public offering. Out of this, ₹760 crore will be garnered through a fresh issue, while ₹200 crore is allocated for the offer for sale (OFS), where existing shareholders will divest a portion of their holdings.
Lot Size and Allotment Date
Interested investors can apply for a minimum of one lot, consisting of 51 shares, and in multiples of 51 thereafter. The likely date for the allotment of shares is December 21, 2023, adhering to the T+3 listing rule.
Registrar and Listing Details
Kfin Technologies Limited has been appointed as the official registrar for the Muthoot Microfin IPO. The public issue is slated for listing on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), with the expected listing date being December 26, 2023.
Expert Opinions
Analysts are divided on their recommendations for potential investors. Shreyansh Shah, a Research Analyst at StoxBox, suggests a ‘Subscribe’ stance for medium to long-term gains. He emphasizes that the infusion of net proceeds into the Tier-I capital base will enhance the company’s capital adequacy and result in a stable leverage position.
On the other hand, Arun Kejriwal, Founder at Kejriwal Research and Investment Services, advises investors to ‘Subscribe for listing gain’ owing to the favorable trend of microfinance companies on Dalal Street. However, he cautions that this theme might lose its sheen after a certain period.
Market Landscape
The Muthoot Microfin IPO is part of a larger trend, with seven public offerings scheduled for subscription this week. These include Motison Jewellers, Suraj Estate Developers, Happy Forgings, Credo Brands, RBZ Jewellers, and Azad Engineering, collectively amounting to significant sums.
Subscription Status and Analyst Views
As of the latest updates, the IPO has received a ‘subscribe’ tag from Anand Rathi and Swastika Investmart. However, Ashika Research, HDFC Securities, and SBI Securities have refrained from rating the public issue.
Grey Market Premium and Company Profile
In the grey market, Muthoot Microfin IPO shares are trading at a premium of ₹82. Founded in 1992, Muthoot Microfin focuses on providing micro-loans to customers, primarily women, with a concentrated effort in rural regions. It operates as a subsidiary of the Muthoot Pappachan Group.
Lot Size and Investment Perspective
Investors have the flexibility to bid for a minimum of 51 equity shares, with subsequent bids in multiples of 51. This translates to a minimum investment of ₹14,127 at the lower price band and ₹14,841 at the upper band for retail investors.
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