New Delhi: Ahmedabad-based retail financing company Mas Financial Services Ltd is looking to hit the capital market with an initial public offering (IPO) to raise around Rs1,000 crore, two persons with knowledge of the matter said.
“The firm is inviting investment bankers for pitches and will finalize bankers soon," one of the persons said on condition of anonymity.
E-mails sent to the company on Tuesday seeking further information remained unanswered as of press time.
Mas Financial’s IPO plan was first reported by VCCircle earlier in September.
In 2011, the company had revealed in a presentation, Vision 2015, that it will look at diluting up to 25% in 2014-16 through an IPO, depending upon the market, to unlock close to Rs800-1,000 crore to fund expansion plans.
At present, the company is 99.99% owned by its promoters.
The company started with an asset size of Rs2 crore, which grew to Rs2,000 crore in financial year 2015.
As per information available on the company’s website, as of 2016, the company had Rs2,564 crore in assets under management (AUMs).
It recorded a profit before tax of Rs81.6 crore in the same period.
Incorporated in 1988, Mas Financial Services is registered with the Reserve Bank of India as a non-banking financial company (NBFC) and offers home loans, micro-enterprise finance, SME loans, two-wheeler and commercial vehicle loans and finance for agricultural activities.
It focuses on providing financial services to lower and middle income groups, spread across urban, semi-urban and rural areas.
Its operations cover Gujarat, Maharashtra, Rajasthan, Madhya Pradesh, Tamil Nadu and Karnataka.
Existing investors in Mas Financial are Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden NV (FMO), Deutsche Investitions-Und Entwicklungsgesellschaft Mbh (DEG) and Lok Capital II LLC.
While the FMO invested Rs43.47 crore through cumulative compulsorily convertible preference shares, DEG invested 10 million euros, as per information available on the company’s website.
The quantum of funds raised from Lok Capital was not disclosed.
Separate e-mailed queries sent to all three investors also went unanswered.
Some of the major listed NBFCs in the country are SKS Microfinance Ltd (now known as Bharat Financial Inclusion Ltd), Ujjivan Financial Services Ltd and Equitas Holdings Ltd.
“Because of the regulatory situation for banks, NBFCs are able to leverage and provide financial products to companies and individuals in a way that is easier and more efficient and sometimes cheaper than banks... But the problem also is that there are a huge number of NBFCs. So it is necessary for them to have a focus or niche to attract investor interest in an IPO," said Harish H.V., partner at Grant Thornton India Llp.
Note: The news of Mas Financial planning an IPO was first reported by VC Circle