Microfinance institutions plan to take IPO route to fund growth plans

CreditAccess Grameen is hoping to raise about Rs 11.3 billion through its IPO

After nearly a decade, microfinance institutions (MFIs) are again looking at raising funds through initial public offerings (IPOs) of equity. 

The IPO of CreditAccess Grameen, a Bengaluru-based MFI, hit the markets on Wednesday. Those of at least two others, Muthoot Microfin and Spandana Sphoorty, are in the pipeline. Another entity, Arohan, is in the process of deciding whether or not to raise money through an IPO.  

Over the past 18 months, most MFIs have been recovering from the after-effects of demonetisation and government-mandated debt waivers. However, with the majority of non-performing loans written off, MFIs are again looking at growing