Muthoot Finance raises Rs 418 cr through IPP

Gold loan finance company Muthoot Finance today raised Rs 418.29 crore through Institutional Placement Program (IPP) in order to comply with the regulatory norms for minimum public shareholding of 25 per cent.
Under the IPP, which was oversubscribed 1.80 times, the offer was made only to qualified institutional buyers.
The company offered fresh 2.5 crore shares of Rs 10 each at a price band of Rs 155-165 per equity. Shares were alloted at the upper end of the price band at Rs 165.
Muthoot Finance had done an Initial Public Offering of its equity shares in April 2011 and listed the shares on Stock Exchanges on May 6, 2011.

Well known and diversified set of QIBs participated in the issue, Muthoot Finance said in a statement.
The issue saw participation from long only investors, including FIIs, Sovereign funds, Life insurance companies and large mutual funds both domestic and international, it said.

The public shareholding as on that date was 19.88 per cent and the SEBI Guidelines stipulated that this should be increased to 25 per cent within 3 years from the date of listing.
Speaking on the occasion, M G George Muthoot, chairman of Muthoot Finance Ltd said at Kochi the company was committed and focused on the growth of the gold loan business and would take all necessary steps for the sector's healthy growth.

George Alexander Muthoot, Managing Director, Muthoot Finance Ltd said the Company had complied with the Sebi Minimum Public Shareholding stipulation well before the May 5 deadline. With the regulatory environment on the sector turning positive, Muthoot would see active interest from domestic and international investors on the company, he said.
"The company could attract investments at a tight discount of 2.40 per cent to the opening market price of Rs 169 per share as on the date of opening of the issue. It shows increased level of confidence in the company after successfully going through the severe regulatory changes in the last two years.