Muthoot sets IPO price band at Rs 160-175 per share

Gold financing company Muthoot Finance Ltd will raise over Rs 900 crore through its initial public offer (IPO).

The company has set a price band of Rs 160-175 a share for the IPO of 51.5 million equity shares, Chief Financial Officer Oommen K Mammen said.

The company is issuing fresh shares to investors. At the lower end of price band the company will raise Rs 824 crore, while on the upper end it will mop up Rs 901.25 crore.

The share offer will begin on April 18 and the biding will close on April 20 for institutional investors. For retail and others investors, it will close on April 21.

The funds raised through IPO would be used to augment the company’s capital adequacy and funding of loans.

The issue will constitute 13.85 per cent of the fully diluted post-issue paid-up equity share capital of the company.

Icra has assigned an ‘IPO Grade 4’, indicating above-average fundamentals of the proposed IPO. Pointing to challenges before the company, the rating agency said Mono-line business model was resulting in limited revenue diversification. Its fee income accounted for only 0.83 per cent of the total income of the company.

ICICI Securities, Kotak Mahindra Capital Co are the book running lead managers to the issue, while HDFC Bank is the co-book running lead manager.