Muthoot Microfin IPO: Should you subscribe or avoid it? Check Anil Singhvi's view

Muthoot Microfin IPO: The initial public offering (IPO) of Muthoot Microfin, the microfinance subsidiary of Muthoot Pappachan group, is open for subscription and it got subscribed 82 per cent on the first day of offer i.e. on Monday. As per the data available on the National Stock Exchange on Monday, the Rs 960 crore initial share sale received bids for 2,00,28,108 shares against 2,43,87,447 shares on offer.

Muthoot Microfin IPO: Subscribe or Aovid? Check Anil Singhvi's View

Muthoot Microfin is a Non-Banking Finance Company (NBFC) and its promoters have strong backgrounds. The company has been in the financing business for long. 

Talking about the IPO Zee Business Managing Editor said that investors should subscribe for short listing gains and invest for the long term.

"The company has strong financials and valuations are attractive. The only negative from my point of view is the cost of borrowing. Cash flow is also negative there is nothing to be worried about. So investors can take benefit of listing gains and can also invest for long time gains," Singhvi said.

Muthoot Microfin IPO: Positives

- Strong promoter background

- Very good growth record 

- Robust financials 

- Attractive valuations

Muthoot Microfin IPO: Negatives

- Borrowing cost is greater than the industry

- Cash flow is negative 

Muthoot Microfin IPO: Price Range

The Initial Public Offering (IPO) has a fresh issue of up to Rs 760 crore and an Offer for Sale (OFS) component of Rs 200 crore. The IPO has a price range of Rs 277-291 a share. The likely date for the share listing of Muthoot Microfin is December 26 2023.

The company has mopped up Rs 284.99 crore from anchor investors. They include Muthoot Finance, WCM International Smallcap Fund, Icici Prudential Life and HDFC Life.

Muthoot Microfin is promoted by Muthoot Fincorp, which is the third-largest gold loan player and the flagship firm of Muthoot Pappachan group.

Muthoot Microfin IPO: Allotment Status

ICICI Securities, Axis Capital, JM Financial and SBI Capital Markets are the managers to the offer and KFin Technologies Limited is the registrar. Once the allotment is done, investors can check the subscription status on the official website of KFin Technologies.

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