Muthoot Microfin Ltd, the microfinance arm of Thiruvananthapuram-based Muthoot Pappachan Group, on Monday said it has raised $50 million (around Rs 375 crore) from private equity firm Greater Pacific Capital.
“With this round of funding, we will look to double our assets under management from Rs 5,000 crore ($670 million) currently to Rs 10,000 crore ($1.3 billion) over the next 2-3 years. We plan to open 500 new branches to increase our presence in our existing markets and selectively expand to additional states.” Sadaf Sayeed, CEO of MML said.
Sayeed added that the funding will further strengthen the company’s balance sheet, taking MML's capital adequacy to over 30% and allow MML to support and empower an additional 1.5-2 million low-income households.
As part of the transaction Akshaya Prasad, partner and managing director at Greater Pacific Capital will join MML’s board. Motilal Oswal acted as sole financial advisor to the transaction.
Currently MML has over 850 branches across 16 states, covering 257 districts. The company said it aims to promote growth and democratise access to finance for the economically weaker section of the country, specifically women entrepreneurs who currently do not have access to traditional borrowing channels.
Muthoot Microfin was granted NBFC-MFI license by the reserve Bank of India (RBI) in 2015. The group hived off the microfinance business to the newly licensed firm last year.
In July, MML raised Rs 75 crore through market-linked debentures.
Muthoot Fincorp, the group’s flagship entity, offers gold and other loans. Muthoot Housing Finance Company Ltd, another group firm, offers housing loans.
The listed Muthoot Finance Ltd is different from Muthoot Pappachan Group.
Muthoot Finance is backed by private equity investors including Abu Dhabi Investment Council, Citigroup, GIC, Goldman Sachs Asset Management and Kotak India Growth Fund.
