Muthoot Capital Dilutes 12.5% Stake By Raising Rs 165 Crore Via QIP
The QIP will enhance capital, lower borrowing costs and facilitate growth, according to Thomas George Muthoot.
Muthoot Capital Services, an arm of the Muthoot Pappachan Group, has raised Rs 165 crore through a qualified institutional placement to shore up its Tier-I capital base.
The institutional share sale was snapped by mutual fund majors like Birla, DSP Blackrock, IDBI, SBI, Sundaram and other investors like Morgan Stanley, Aurigin Master Fund Singapore and Goldman Sachs, group and managing director Thomas George Muthoot told PTI. After the issue, promoters' stake has come down by 12.43 percent to 62.5 percent, the company said.
The issue enhances the capital adequacy position of the company to 26.7 percent from 15.4 percent in September, the Kochi-based group said, adding this has increased its debt leveraging 2.9 times.
The capital raised will strengthen our balance sheet, facilitate growth and lower our borrowing costs. It will also be an impetus for further growth and moving into new products.Thomas George Muthoot, MD, Muthoot Capital Services
Muthoot said the company has been steadily diversifying into the non-South markets, controlling operating costs and improving asset quality over the past 18 months. He added that the company will be looking at additional sources of funding through debentures and more securitization transactions to drive its planned growth.
Muthoot Capital Services sells two-wheeler loans, which accounts for 89.5 percent of its gross portfolio of Rs 1,749 crore. It has a presence in 17 states and union territories. The firm services over 2,200 dealerships in 15 states and has a strong presence with Hero Motocorp Ltd. and Honda Motorcycles, which together contribute more than 80 percent of its total business.