Thursday, October 5, 2023

Manappuram Finance Promoted Asirvad Micro Finance Limited files draft papers for a Rs 1500 crore IPO

Asirvad Micro Finance, the subsidiary of listed NBFC Manappuram Finance, a non-banking finance company - microfinance institution ("MFI”) offering microfinance loans to low-income women, servicing and empowering an unbanked population to socially and economically underprivileged, has filed its Draft Red Herring Prospectus (DRHP) with capital market regulator Sebi to raise funds for its initial public offering (IPO).

The IPO has a face value of Rs 10 per share and is a fresh issue of equity shares up to Rs 1500 crore with no offer for sale (OFS) component. 

The issue is being made through the book-building process, wherein not less than 75% of the issue shall be available for allocation on a proportionate basis to qualified institutional buyers, not more than 15% of the issue shall be available for allocation to non-institutional bidders, and not more than 10% of the issue shall be available for allocation to retail individual bidders.

The company, in consultation with the lead bankers to the issue, may consider a further issue of equity shares on a private placement for cash consideration aggregating up to Rs 300 crore (“Pre-IPO Placement”). If such placement is completed, the fresh issue size will be reduced.

As per the DRHP, the net proceeds from the fresh issue will be used to augment the capital base of the Company to meet future business requirements and plan to be deployed in FY24.

Asirvad Micro Finance embarked on its journey in 2008 with just two branches in Tamil Nadu. Over the years it has expanded its reach across India, to now be present across 22 states and 4 UTs through a network of 1684 branches, as on March 31, 2023 which covers 450 districts 

As on March 31, 2023 it caters to 3.25 million active borrowers in the microfinance portfolio that constitutes a majority of its assets under management. It also caters to Loan against Gold and provides MSMEs loans 

It stands to be India’s Largest NBFC MFI considering its geographic reach and third in terms of assets under management and no of clients. It ranks 2nd in terms of state presence and maintaining the lowest concentration amongst the top 3 states when compared to the top 10 NBFC MFIs in the country 

Asirvad has not only seen a substantial growth in its client base, in FY23 where it grew over 16% but also led when it comes to disbursement per branch.  

For Fiscal 2022-23, Asirvad Micro Finance had an AUM (assets under management) of Rs 10,040.89 crore against Rs 7,002.18 crore for Fiscal 2021-22. Its Profit After Tax stood at Rs 218.13 crore in FY22-23 as compared to Rs 15.26 crore in FY 21-22, making it the second-best firm in terms of year-on-year growth among the MFI Peer Group. 

In Fiscal 2023, it posted the third-highest return on equity and the fourth-highest return on assets among the MFI Peer Group, at 17.09% and 2.63%, respectively.

JM Financial Limited, Kotak Mahindra Capital Company Limited, Nomura Financial Advisory and Securities (India) Private Limited, and SBI Capital Markets Limited are the book-running lead managers, and Link Intime India Private Limited is the registrar of the offer. The equity shares are proposed to be listed on the BSE and NSE.

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