About Asirvad Micro Finance
Asirvad Micro Finance, a subsidiary of Manappuram Finance, has received approval from the Securities and Exchange Board of India (SEBI) to launch its IPO, aiming to raise ₹1,500 crore in fresh capital. Manappuram, which owns 97.59% of Asirvad, will not sell any stake in the IPO. Asirvad, providing microfinance loans to low-income women,servicing and empowering an unbanked population of the socially and economically underprivileged.
Issue Size of the upcoming IPO
The fresh issue of equity shares aims to augment our company’s capital base to meet future business requirements. Additionally, listing the equity shares on stock exchanges is expected to enhance our brand image among existing and potential customers and create a public market for our shares in India.
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The Asirvad Microfinance IPO will be a fresh issue of up to ₹1,500 crore, with no offer for sale component. At least 75% of the IPO will be allocated to qualified institutional buyers (QIBs) on a proportionate basis, 15% to non-institutional bidders, and 10% to retail individual bidders.
Additionally, Asirvad Microfinance may consider a private placement of equity shares worth up to ₹300 crore. If this placement occurs, the fresh issue size will be reduced accordingly.
Core business of the IPO bound - Asirvad Micro Finance
Founded in 2008 with two branches in Tamil Nadu, the company has expanded to a pan-India presence, becoming one of the most geographically diversified microfinance institutions (MFIs) in the country. As of March 31, 2023, its top three states contribute 37.33% of its Assets Under Management (AUM), while the top five states account for 54.29% of the AUM.
By March 31, 2023, the company was recognized as India's largest MFI by geographic coverage, operating in 450 districts across 22 states and four union territories, with 1,684 branches. Its microfinance loan portfolio spans 391 districts, ranking it third in India by AUM. Additionally, as of June 30, 2023, the company had 0.10 million active borrowers in its secured Loans against Gold portfolio.
Strengths
- Third largest MFI by AUM, with scalable operations and controlled ticket sizes.
- Most geographically diversified MFI with the lowest concentration in the top three states.
- Simplified, borrower-centric products and processes, enhancing transparency, growth, and relationships.
- Low-cost liability franchise with a diverse borrowing mix; first NBFC-MFI rated AA- by a credit rating agency.
- Advanced, scalable technology infrastructure & Strong risk management, on-ground audits, vigilance checks, and crisis-tested collection capabilities ensure healthy asset quality.
- Experienced Board and senior management, supported by a reputable parent company
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Promoters & Promoters Group of Asirvad Micro Finance
Manappuram Finance Limited (MAFIL) is the promoter of the company, holding 195,485,619 equity shares, which represents 97.59% of the fully-diluted equity share capital. MAFIL, a listed company, has had its equity shares listed on the BSE since November 10, 1995, and on the NSE since December 1, 2014. Additionally, its debt securities are listed on the BSE. MAFIL's diverse business operations include gold loans, personal loans, business loans, vehicle loans, foreign exchange and money transfer services, and small-scale industrial finance.
Book running lead managers of the IPO
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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