Muthoot Finance Share price and Fundamental Analysis

Company History

Muthoot Finance Limited is the largest gold financing company in India in terms of loan portfolio. Headquartered in Kerala, the Company provides personal and business loans secured by gold jewellery, or Gold Loans, primarily to individuals who possess gold jewellery but could not access formal credit within a reasonable time, or to whom credit may not be available at all, to meet unanticipated or other short-term liquidity requirements.

The company's wholly-owned subsidiary Muthoot Insurance Brokers Pvt Limited (MIBPL) is licensed as a direct broker by IRDAI since 2013 and is actively distributing both life and non-life insurance products of various insurance companies. Muthoot Finance's another wholly-owned subsidiary Muthoot Homefin (India) Limited is a housing finance company with a focus on affordable housing finance. Muthoot Finance's subsidiary Belstar Investment and Finance Private Limited (BIFPL) is a microfinance company. Muthoot Finance holds 66.61% of equity share capital of BIFPL. Muthoot Finance's foreign subsidiary Asia Asset Finance PLC (AAF), Colombo is involved in Retail Finance, Hire Purchase & Business Loans.

Muthoot Finance Limited was incorporated as a Private Limited Company on 14th March, 1997 with the name 'The Muthoot Finance Pvt Ltd.' and was converted into a Public Limited Company on November 18, 2008. The Company was promoted by Late Mr. M. G. George Muthoot, Mr. George Thomas Muthoot, Mr. George Jacob Muthoot and Mr. George Alexander Muthoot who collectively operated under the brand name of 'The Muthoot Group'. The Company's operating history evolved over a period of 70 years since M George Muthoot, the father of the promoters founded a gold loan business in 1939 under the heritage of a trading business established by his father, Ninan Mathai Muthoot, in 1887.

In the year 2001, the Company obtained the license from RBI to function as an NBFC. In the year 2005, as per the Scheme of Amalgamation, Muthoot Enterprises Private Limited was amalgamated with the Company with effect from March 22, 2005.

In May 16, 2007, the name of the company was changed from The Muthoot Finance Pvt Ltd to Muthoot Finance Pvt Ltd. During the year 2008-09, the company opened 278 new branches across various states. Also, they opened regional offices in Sales and Visakhapatnam.

In November 18, 2008, the company was converted into public limited company and the name was changed to Muthoot Finance Ltd. They obtained fresh RBI license to function as an NBFC without accepting public deposits, consequent to change in name.

During the year 2009-10, the company added 620 new branches. As per the scheme of de-merger, the radio business of the company was demerged and transferred to Muthoot Broadcasting Pvt Ltd with effect from January 01, 2010.

The company opened 316 new branched between April 2010 to August 2010. During the year 2010, the company's branch network crossed 1,600 branches, retail loan portfolio crossed Rs 7400 crore, retail debenture portfolio crossed Rs 2700 crore, net owned funds crossed Rs 500 crore, gross annual income crossed Rs 1000 crore and bank credit limits crossed Rs 1700 crore.

In 2011, the company's retail loan portfolio crossed Rs 15800 crore, retail debenture portfolio crossed Rs 3900 crore, net owned funds crossed Rs 1300 crore, gross annual income crossed Rs 2300 crore, bank credit limit crossed Rs 6000 crore and branch network crossed 2,700 branches. During the year, Muthoot Finance received PE investments of Rs 255.68 crore from Matrix partners, LLC, The Welcome Trust, Kotak PE, Kotak Investments and Baring India PE. In April 2011, Muthoot Finance successfully raised Rs 901.25 crore from an initial public offer.

In 2012, Muthoot Finance's retail Loan portfolio crossed Rs 24600 crore, retail debenture portfolio crossed Rs 6600 crore, net owned funds crossed Rs 2900 crore, gross annual income crossed Rs 4500 crore, bank credit limit crossed Rs 9200 crore and branch network crossed 3,600 branches. During the year, the company raised Rs 693 crore through Non-convertible Debenture Public Issue- Series I and Rs 459 crore through Non-convertible Debenture Public Issue - Series II.

In 2013, Muthoot Finance's branch network crossed 4,400 branches. During the year, the company raised Rs 259 crore through Non-convertible Debenture Public Issue- Series III, Rs 277 crore through NCD Public Issue - Series IV and Rs 300 crore through NCD Public Issue - Series V. During the year, the company obtained RBI license to start operating 9,000 White Label ATMs.

In 2014, Muthoot Finance raised Rs 418 crore through the oversubscribed (1.8 times) Institutional Placement Progrmame (IPP). During the year, the company acquired 51 per cent equity shares of Colombo-based Asia Asset Finance PLC (AAF).

In 2015, Muthoot Finance's retail loan portfolio reached Rs 23409 crore, net owned funds crossed Rs 5000 crore, gross annual income reached Rs 4325 crore and profit after tax reached Rs 671 crore.

In 2016, Muthoot Finance's retail loan portfolio crossed Rs 24300 crore, net owned funds crossed Rs 5500 crore, gross annual income reached Rs 4875 crore and profit after tax for the year reached Rs 810 crore. During the year, the company acquired 79% of the equity capital of Muthoot Homefin (India) Limited (MHIL). MHIL is a housing finance company registered with The National Housing Bank.

In June 2016, Muthoot Finance acquired Muthoot Insurance Brokers Private Limited (MIBPL) as a wholly-owned subsidiary. MIBPL is an unlisted private limited company holding a licence to act as direct broker from IRDA since 2013. In July 2016, Muthoot Finance acquired 46.83% of the capital of Belstar Investment and Finance Private Limited (BIFPL). BIFPL was reclassified as an NBFC-MFI' by RBI with effect from 11 December 2013. In 2016, credit rating agencies CRISIL and ICRA upgraded Muthoot Finance's long-term debt rating.

The Board of Directors of Muthoot Finance in its meeting held on 13 February 2017 decided to make an additional investment in M/s. Muthoot Homefin (India) Limited (MHIL), a subsidiary company, by way of purchase of 17 lakh equity shares of face value Rs. 10/- each at a price of Rs. 11.37/- per share aggregating to Rs. 1.93 crore approximately from an existing shareholder. Post the investment, Muthoot Finance Ltd. will have 88.27% shareholding in MHIL.

On 18 September 2017, Muthoot Finance announced that it has completed the acquisition of Muthoot Homefin (India) Limited (MHIL) by way of purchase of 88 lakh equity shares of face value Rs. 10/- each at a price of Rs. 44/- per share aggregating to Rs. 38.72 crore from existing shareholders and has made a further investment by subscribing to 2.27 crore equity shares of nominal value of Rs. 10/- each at Rs. 44/- each, as approved by the Board at its meeting held on 8 August 2017. Post investment, the Muthoot Finance is holding 100% paid up share capital of MHIL and MHIL has become the wholly owned subsidiary of Muthoot Finance Ltd.

On 23 March 2018, Muthoot Finance announced that the company has further invested in 14 lakh Equity Shares of nominal value of Rs 10 each at a total price of Rs 7 crore by way of subscription to rights issue of Belstar Investment and Finance Private Limited. With this investment, the company has increased its shareholding in aforesaid subsidiary to 66.61% from existing shareholding of 64.60%.

On 5 July 2018, Muthoot Finance announced that it has agreed in principle to acquire shares as well as subscribe to equity shares of Muthoot Money Pvt Ltd (MMPL) which will result in the change of management/control of MMPL. This is with the intention of further diversifying its business activities. MMPL is engaged in lending and other businesses, primarily vehicle finance business.

On 20 July 2018, Muthoot Finance announced that Securities and Exchange Board of India (SEBI) has provided its primary approval to the company for setting up Asset Management Company and Trustee Company along with other compliance under SEBI (Mutual Fund) Regulations, 1996 in order to get registered with SEBI for the proposed mutual fund. The company has to complete the registration process within 6 months of the primary approval in order to get registered with SEBI for setting up proposed mutual fund Business, subject to further regulatory approvals.

The Loan Assets Portfolio of the Company increased by Rs 51,041.00 million during the year 2018-19 reaching Rs 342,461.20 million as on 31 March 2019 as against Rs 291,420.20 million as on 31 March 2018.The Net Interest Margin was 14.47% as compared to 15.29% in the previous FY 2017-18.

The company successfully completed 18th and 19th Issue of Non-Convertible Debentures through Public Issue during FY 2018-19 raising Rs 37,094.57 million.The company has raised Rs 5,750.00 million through Private Placement of debentures.

As on 31 March 2019 the company has seven subsidiaries namely M/s. Asia Asset Finance PLC, M/s. Muthoot Homefin (India) Limited, M/s. Muthoot Insurance Brokers Private Limited, M/s. Belstar Investment and Finance Private Limited, M/s. Muthoot Money Limited, M/s. Muthoot Asset Management Private Limited and M/s. Muthoot Trustee Private Limited.

The Loan Assets Portfolio of the Company increased by Rs 73,644.85 million during the year reaching Rs 416,106.05 million as on 31 March 2020 as against Rs 342,461.20 million as on 31 March 2019.The Net Interest Margin was 15.52% as compared to 14.47% in the previous FY19.

The company successfully completed 20th, 21st, and 22nd Issue of Non-Convertible Debentures through Public Issue during FY20 raising Rs 21,015.24 million.The company has raised 14,250.00 million through Private Placement of debentures during the financial year.

Muthoot Finance Limited was awarded India's No. 1 Most Trusted Financial Services Brand for the 5th year in a row by Brand Trust Report 2020.

The Loan Assets Portfolio of the Company increased by Rs 110,117.32 million during the year reaching Rs 526,223.37 million as on 31 March 2021 as against Rs 416,106.05 million as on 31 March 2020.The Net Interest Margin was 14.24% as compared to 15.52% in FY 2019- 20.

The company successfully completed 23rd and 24th Issue of Non-Convertible Debentures through Public Issue during FY 2020-21 raising Rs 22,929.86 million.The company has raised Rs 36,455.00 million through Private Placement of Non-Convertible Debentures during the financial year.

As on 31 March 2021 the company had seven subsidiaries namely Asia Asset Finance PLC, Muthoot Homefin (India) Limited, Muthoot Insurance Brokers Private Limited, Belstar Microfinance Limited, Muthoot Money Limited, Muthoot Asset Management Private Limited and Muthoot Trustee Private Limited.

As on 31 March 2021,the company have 4632 branches across 29 states and union territories.

As on 31 March 2022, the company had 5,579 branches across 29 states and union territories.

As on March 31, 2022, Company had 7 subsidiaries namely Asia Asset Finance PLC, Muthoot Homefin (India) Limited, Muthoot Insurance Brokers Private Limited, Belstar Microfinance Limited, Muthoot Money Limited, Muthoot Asset Management Private Limited, and Muthoot Trustee Private Limited. Loan assets portfolio crossed Rs. 580 billion in FY 2022. It raised fresh equity of Rs 2,750 million in Belstar Microfinance Limited, resulting in reduction of Muthoot Finance's equity stake to 60.69%. It launched the Loan Originating System by name iMithra to digitally originate the leads for better TAT. It focused more on funding Cars and new two wheeler in vehicle loan portfolio.

As on March 31, 2023, the Company had 5,838 branches with 259 new branches opened during the year. It has a loan portfolio of Rs.14,381 million. Muthoot Finance holds 56.97% in Belstar Microfinance Limited (BML).