Muthoot Finance prices IPO between Rs160-175

Muthoot Finance has fixed a price band of Rs 160-175 per share for its initial public offering (IPO) scheduled to open on April 18. The company plans to raise Rs 9bn from the issue. Bidding for the 51.5 million equity share sale will close on April 21 for retail shareholders, while for qualified institutional bidders (QIBs) it will close a day earlier.

ICICI Securities and Kotak Mahindra Capital are the book running lead managers to the issue, while HDFC Bank is the co-manager.

Post IPO, the promoters’ stake in the company will stand reduced to 80% from the present 93%.

The capital raised from the IPO will be utilised to boost its capital base for meeting future capital requirements, for funding of loans and for general corporate purposes. "The IPO proceeds will help boost our capital adequacy ratio, which is 15% as on November," said chairman, MG George Muthoot.

Muthoot Finance operated 2,611 branches across 20 states as on Nov. 30, 2010 while outstanding gold loans stood at Rs 12,897 crore during the period. For eight months ended November 30, 2010, Muthoot’s total income was at Rs 1,302 crore and profit after tax stood at Rs 291 crore during the period.