Belstar Microfinance files DRHP with Sebi for Rs 1,300 crore IPO

Muthoot Finance on Saturday said that its subsidiary, Belstar Microfinance, has filed a draft red herring prospectus (DRHP) for an initial public offering (IPO) worth Rs 1300 crore with the Securities and Exchange Board of India (Sebi).

According to the DRHP, the fresh issue of equity shares is worth Rs 1000 crore, and the offer-for-sale (OFS) is Rs 300 crore by existing investors.

Danish asset management firm MAJ Invest, which holds around 8.74 per cent stake, intends to divest shares valued at Rs 175 crore. Arum Holdings Ltd, which has a 13.94 per cent stake, will sell shares worth Rs 97 crore, while Augusta Investments Zero Pte Ltd, which owns a 4 per cent shareholding, will divest shares worth Rs 28 crore.

The parent company, Muthoot Finance, holds a 66.13 per cent stake in Belstar Microfinance.

The proceeds from the fresh issuance, amounting to Rs 760 crore, will be allocated towards meeting future capital requirements for onward lending, while the remaining funds will be used for general corporate purposes.

For the nine months of FY24 (9MFY24), the net profit of the microfinance firm stood at Rs 235 crore, with a revenue of Rs 1283 crore. The company is primarily involved in lending for the 'self-help group' (SHG), which accounted for 57 per cent of its total loan portfolio worth Rs 8834.2 crore as of December 31, 2023.

The lead book-running managers of the IPO are ICICI Securities, Axis Capital, HDFC Bank, and SBI Capital Markets.