Muthoot Finance IPO Rating, Grading, CRISIL Grade 4

Muthoot Finance Ltd (MFL), which proposes to launch an Initial Public Offering (IPO) soon, has received a rating of ‘four on five’ from Crisil Equities and ‘IPO Grade 4′ from Icra. The Kochi-based company plans to issue 51.5 million equity shares of Rs 10 face value with a premium that will be determined through a book-building process.

According to a company release, the Crisil rating indicates that the fundamentals of the IPO are above average relative to other listed equity securities in India. The grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The Icra grade indicates above average fundamentals.

The shares on offer will constitute 13.85 per cent of the fully diluted, post-issue, paid-up equity share capital of the company. Following the IPO, the shareholding of the promoters of the company will reduce from 93 per cent to 80.12 per cent.

The offer would be made through the 100 percent book-building route. Of the net offer, 50 per cent is reserved for Qualified Institutional Buyers (QIBs) while 15 per cent and 35 per cent, respectively, are reserved for non-institutional investors and retail investors. Post-IPO, the shares will be listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

The objective of the offer is to augment the company’s capital base in order to support its capital requirements arising out of anticipated growth in assets and for also compliance with regulatory capital adequacy requirements.