Muthoot Fin sees asset book growing by 50% in 3 yrs

Muthoot Finance, which is aiming to raise Rs 900 crore through an IPO, today said it expects 50% growth in its asset book in the next 2-3 years.

The company's gross assets, which comprise gold mortgages, at the end of September 2010 were Rs 13,000 crore, which were over 70% more than that in March 2010.

"We expect the growth momentum to continue for the fiscal ending March 2011. In the previous fiscal (2009-10) our assets had grown by 120%," Muthoot Group MD George Muthoot told PTI.

He said the growth momentum would gradually slow down going ahead and the company would continue to clock 45-50% growth in the next 2-3 years.

Gold financing company Muthoot Finance today launched its initial public offer at a price band of Rs 160-175 a share. The issue of 5.15 crore equity shares closes on April 21.

Post IPO, the promoter holding in the company would come down to 80.1%, and remaining would be held by four private equity investors and general public.

"The total market for gold finance in India is Rs 35,000 crore. The total gold available is 18,000 tonnes and Muthoot has only 97 tonnes. So there is a huge potential in gold mortgage market," Muthoot added.

The Kerala-based company has finalised the allocation of 77.25 lakh shares to 15 anchor investors at Rs 170 a share. Thereby, raising over Rs 130 crore.

The anchor investors that bought shares in the pre-IPO sale include Citigroup Global Markets Mauritius, Abu Dhabi Investment Authority, Goldman Sachs India Fund and Baring India Private Equity Fund.

As of 1600 hours, the IPO was subscribed 15% on the first day of offer today, as per data available with the National Stock Exchange.

The IPO proceeds will be utilised to augment the company's capital base for meeting future capital needs, for funding of loans and for general corporate purposes.

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