Muthoot Pappachan eyes raising up to Rs800 crore from private equity funds
Mumbai: Ernakulam-based Muthoot Pappachan Group wants to raise Rs.600-800 crore from private equity funds in 2015-16, chairman and managing director Thomas John Muthoot said.
The 128-year-old group is being advised by ICICI Securities and consultancy firm EY to raise the money, Muthoot said. Part of the funds will be infused into the company’s microfinance subsidiary which has recently received a licence from the Reserve Bank of India (RBI).
Initially, the group will infuse Rs.200 crore in the new microfinance venture through promoter funding.
To be sure, the group has already been involved in micro-lending through its flagship Muthoot Fincorp and has a loan book worth Rs.1,500 crore under this business segment. Having received the permit, it plans to hive off the microfinance business into a separate subsidiary, called Muthoot Microfinance.
Muthoot Microfinance plans to hire 3,000 people in the next two years, the group said in a statement on Thursday. It also plans to open branches in more states including Odisha, Madhya Pradesh and Uttar Pradesh. At present the group extends microfinance loans in Kerala, Tamil Nadu, Karnataka, Gujarat, Maharashtra, Goa and Puducherry.
The group also plans to issue non-convertible debentures worth Rs.1,000 crore this financial year to aid its lending activities, Muthoot said. Of this, Rs.300 crore worth of NCDs will be issued in June.
Muthoot added that the group will be looking for an initial public offering in financial year 2017-18.
Apart from financial services like gold loans, small and medium enterprise loans and two wheeler loans, the Muthoot Pappachan Group also has interests in real estate, hospitality, auto dealerships, healthcare, among others.