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Muthoot Finance to hit capital market in Jan 2011

Mumbai, India, November 10, 2010 Gold financing company Muthoot Finance on Wednesday said it is planning to hit the capital market in January to raise funds to fuel its growth. “We have filed our DRHP in September and are awaiting regulatory approval. We hope to hit the capital market by January-end next year,” Muthoot Group Managing Director George Alexander Muthoot told PTI here. He said the company, mainly a family-owned gold financing firm started in 1939, plans to raise capital to support its growing gold loan business and strengthen its capital adequacy ratio currently at 14.79 per cent. “The capital adequacy requirement is 12 per cent. However, the business is growing and we need to be prepared for that,” he said. The non-deposit taking NBFC has already diluted 7 per cent stake to four private equity investors. “Post this initial public offering (IPO), the dilution will go up to 13.85 per cent,” he said, adding that there is no offer from the PE funds for dilution. The stipulated dilution of 25 per cent would be achieved as per the guidelines issued by SEBI, he said. Muthoot Finance will issue 5.51 crore fresh equity shares for the IPO, he said. The company's assets under management were Rs 7,341 crore as of March 31, 2010, compared to Rs 3,300 crore in the year-ago period. "The growth was about 122 per cent and looking forward we expect it to be similar or more," he said without giving details.

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