Muthoot Finance jumps after posting strong Q4 results

Muthoot Finance jumped 8.07% to Rs 232.45 at 12:55 IST on BSE after net profit rose 60.55% to Rs 265.22 crore on 31.71% growth in total income to Rs 1451.28 crore in Q4 March 2016 over Q4 March 2015.

The result was announced after market hours on Friday, 27 May 2016.

Meanwhile, the BSE Sensex was up 39 points, or 0.15%, to 26,692.93.

On BSE, so far 94,273 shares were traded in the counter, compared with an average volume of 34,177 shares in the past one quarter. The stock hit a high of Rs 238.85, which is also a 52-week high for the stock. The stock hit a low of Rs 227.05 so far during the day. The stock hit a 52-week low of Rs 152 on 23 September 2015. The stock had outperformed the market over the past one month till 27 May 2016, gaining 2.97% compared with Sensex's 2.26% gains. The scrip had also outperformed the market in past one quarter, gaining 20.03% as against Sensex's 15.11% gains.

The mid-cap company has an equity capital of Rs 399 crore. Face value per share is Rs 10.

Meanwhile, in a separate announcement made after market hours on Friday, 27 May 2016, Muthoot Finance said that it will hold 19.5% stake in Belstar Investment and Finance (BIFPL) after acquiring 13.93% of equity share capital of in May 2016 and entering into binding agreement to acquire another 5.57%. BIFPL is an NBFC engaged in the business of micro finance based out Chennai. The company is also planning to acquire additional 11.14% stake in BIFPL subject to regulatory approvals.

Further, the company has entered into binding term sheet to infuse Rs 40 crore in BIFPL. Consequent to the completion of the transactions, the company will be holding 57% of equity share capital of Belstar thereby making it a subsidiary.

BIFPL predominantly follows the self help groups (SHG) model of lending. Effective January 2015, BIFPL started working in JLG model of lending in Pune district, Maharashtra. As of 31 March 2016, BIFPL's operations are spread over four states and 1 UT (Tamil Nadu, Karnataka, Madhya Pradesh, Maharashtra and Pondicherry). It has 76 branches, with 13 controlling regional offices in 12 districts and employs 561 staff. Its loan portfolio has grown from Rs 0.02 crore in March 2009 to Rs 264 crore in March 2016. BIFPL's net profit stood at Rs 3 crore in FY 2016.

Meanwhile, Muthoot Finance said that subsequent to receiving regulatory approvals, the company invested Rs 44.91 core in Muthoot Homefin (India) acquiring 79% of sharecapital making it a subsidiary. It has started its operations primarily in Kerala and Maharashtra. It is primarily focusing on affordable housing segment. As on 31 March 2016, it has a loan portfolio of Rs 30 crore. Muthoot's board of directors has also decided to submit an application to Securities and Exchange Board of India (Sebi) seeking its approval to act as a sponsor of a Mutual Fund. Muthoot is also awaiting regulatory clearance on 100% acquisition of Muthoot Insurance Brokers, an IRDA registered Insurance Direct Broker.Further, company increased its shareholding in Asia Asset Finance Plc, its Srilankan subsidiary from 51% to 59.7% during the year ended 31 March 2016 (FY 2016).

Muthoot Finance is the largest gold financing company in India in terms of loan portfolio.

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