Gold finance firm Muthoot Finance Ltd (MFL) is expecting to growth 50 to 60 per cent in assets under management (AUM) from last year's Rs 15,868 crore. The company is launching around 650 branches through out the country with an investment of around Rs 10 lakh per branch in the fiscal.
MFL managing director George Alexander Muthoot said, "Last year, our AUM had gone up a 113 per cent. This year, we expect it to grow a moderate 50 to 60 per cent at Rs 9,000 crore." The company's gold loan disbursement was Rs 2,081 crore in the first quarter of the current fiscal taking the total loan lending against gold to Rs 17,949 crore.
The company is expecting a disbursement of around Rs 2,000 crore for the next fiscal. It may need capital infusion to meet the AUM growth, and would look at bank loans and mutual funds for funding, he said. However, he refused to reveal any more on the fund raising plans at this stage.
It has recently submitted a proposal to the regulators to raise Rs 1,000 crore through issue of secured non-convertible debentures (NCDs), of which Rs 500 crore would be the issue with option to retain over-subscription of up to Rs 500 crore. Almost 50 per cent of the issue would be through retail debuntures. It is expecting official nod from the regulators in another week.
It may also look at fund raising from the share market in another 18 months to maintain the capital adequacy ratio, if the current growth rate is maintained. It currently has a capital adequacy of 19 per cent as against the required rate of 15 per cent. The company, in April 2011, has entered into the public market through initial public offering (IPO).
Muthoot Finance, which had around 2,900 branches as of March 31, 2011, in 21 states and four Union Territories, has set up around 100-150 branches in the first three months of current fiscal. It has targeted to open a total of 3,500 branches by the end of current fiscal.