The IPP oversubscribed 1.8 times having raised Rs 418 crore that will be used for gold loan business.
Muthoot Finance has successfully completed its Institutional Placement (IPP) in order to comply with Securities and Exchange Board of India (SEBI) guidelines for the minimum shareholding to come to 25 percent.
The IPP oversubscribed 1.8 times having raised Rs 418 crore that will be used for gold loan business.
Oommen Mammen, Chief Financial Officer, Muthoot Finance feels their capital adequacy ratio will improve by 1.5 percent post IPP.
The company has reportedly lost many portfolios in the last year due to changes in policies, he says in an interview with CNBC-TV18.
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Below is the verbatim transcript of the interview:
Q: Can you tell us how much money you have raised and what will this money be used for?
A: We raised the issue 2.5 crore shares and now the issue was made at the upper end of the price band at Rs 165. We have raised total amount of Rs 418 crore, this apart from improving your capital adequacy ratio, we will be using the funds for gold loan business.
Q: What is the capital requirement after this particular issue?
A: As of December, we have a tier I capital of 17 percent against the regulatory minimum requirement of 12 percent. Therefore, after the issue, our capital adequacy will be improving by about 1.5 percentage thereby becoming about 18.5 percentage.
Q: Who were the principal investors in your IPP?
A: I may not be able to share exact names but generally, I can say that we saw a good set of participation from domestic institutions, mutual funds as well as FIIs. So, there are good set of names which have come in. This shows a confidence in company's business.
Muthoot Finance stock price
On May 05, 2014, at 14:10 hrs Muthoot Finance was quoting at Rs 181.00, down Rs 2.05, or 1.12 percent. The 52-week high of the share was Rs 188.90 and the 52-week low was Rs 73.60.
The company's trailing 12-month (TTM) EPS was at Rs 22.04 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 8.21. The latest book value of the company is Rs 100.50 per share. At current value, the price-to-book value of the company is 1.80.
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