Mumbai: Non-banking finance company (NBFC) MAS Financial Services Ltd on Thursday said it will launch its Rs460 crore initial public offering (IPO) on 6 October.
The Gujarat-based company has priced its shares at Rs456-459. At the upper end of this price band, the initial share sale values the NBFC at approximately Rs2,275 crore. The IPO will close on 10 October. The IPO includes a fresh issue of Rs233 crore. The proceeds from the fresh issue will be used to augment its capital base to meet future capital requirements.
“As an NBFC, we are subject to regulations relating to the capital adequacy, which determine the minimum amount of capital we must hold as a percentage of the risk-weighted assets on our portfolio and of the risk adjusted value of off-balance sheet items, as applicable," the company’s red herring prospectus said.
Under Reserve Bank of India’s Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, NBFCs are required to maintain a minimum capital adequacy ratio (CAR) of 15%.
Existing investors will collectively sell shares worth Rs227 crore in the share sale. Germany’s development finance institution DEG-Deutsche Investitions-und Entwicklungsgesellschaft MBH (DEG) plans to fully exit MAS Financial. DEG will sell its entire 2.47 million shares for Rs112.66 crore. It had invested Rs65 crore in 2012.
Another investor NederlandseFinancierings–MaatschappijvoorOntwikkelingslanden N.V. (FMO) also plans sell all of its 1.74 million shares, which at the upper end of the price band will fetch it Rs79.34 crore. FMO invested Rs43 crore in MAS Financial in 2008.
Impact investor Lok Capital, which currently holds 1.28 million shares in MAS Financial, will take a part exit. Lok Capital will sell around 768,433 shares, which will fetch the impact investor Rs35 crore. Lok Capital invested Rs41.33 crore in 2014.
In March, Motilal Oswal Private Equity bought around 8% in MAS Financial for Rs135 crore. The private equity investor is not selling any stake in the IPO. MAS Financial has hired Motilal Oswal Investment Advisors Ltd to manage its public offering.