Manappuram Finance shares rise up to 5% after Asirwad Microfinance gets SEBI nod for IPO

Shares of Manappuram Finance rallied as much as 5.3% to hit an intraday high of ₹207.30 on the BSE after its subsidiary Asirwad Microfinance received SEBI's approval to launch an initial public offering (IPO). Paring most of early gains, the NBFC stock ended 1.65% higher at ₹200, with a market capitalisation of ₹16,929 crore on the BSE.

Asirvad Micro Finance, a non-banking finance companies-microfinance institutions (NBFC-MFIs), has received final observation from the capital markets regulator Securities and Exchange Board of India (SEBI) to raise capital through an IPO route. The company, which offers microfinance loans to low-income women, servicing and empowering an unbanked population to the socially and economically underprivileged, filed preliminary IPO papers with SEBI on October 4, 2023.

The public issue is a fresh issue of equity shares up to ₹1,500 crore with no offer for sale (OFS) component. As per the DRHP filed with the regulator, the net proceeds from the fresh issue will be used to augment the capital base of the company as well as to meet future business requirements and plan to be deployed in FY24.

The IPO document shows that the company has reserved up to 75% of the issue for qualified institutional buyers, not more than 15% for non-institutional bidders, and the remaining 10% for retail individual bidders.

The company, in consultation with the lead bankers to the issue, may consider a Pre-IPO placement of up to ₹300 crore. If such placement is completed, the fresh issue size will be reduced, the DRHP noted.

Asirvad Micro Finance started its journey in 2008 with just two branches in Tamil Nadu. Over the years, it has expanded its reach across India, with 1,684 branches across 22 states and 4 UTs, covering 450 districts, as on March 31, 2023.

As of March 31, 2023 it caters to 3.25 million active borrowers in the microfinance portfolio that constitutes a majority of its assets under management. It also offers loans against gold and provides MSME loans.

JM Financial Limited, Kotak Mahindra Capital Company Limited, Nomura Financial Advisory and Securities (India) Private Limited, and SBI Capital Markets Limited are the book-running lead managers, and Link Intime India Private Limited is the registrar of the offer. The equity shares are proposed to be listed on the BSE and NSE.

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