Asirvad Micro Finance Looks To Raise Rs 1,500 Crore Through IPO

Manappuram Finance subsidiary Asirvad Micro Finance Ltd. will launch an initial public offering to raise Rs 1,500 crore. The microfinance lender filed its draft red herring prospectus with the Securities and Exchange Board of India on Thursday.

The company is looking to raise the entire Rs 1,500 crore through fresh issuances of shares, according to the prospectus. Manappuram Finance currently owns a 97.59% stake in Asirvad Micro Finance.

Managers of the issue include JM Financial, Kotak Investment Banking, Nomura Financial Advisory and Securities, and SBI Capital Markets.

Through the public offering Asirvad Micro Finance is looking to augment its capital base. As of June 2023, the company's capital adequacy ratio was 23.12%, which included 17.84% in tier-1 capital. A year ago, these figures were 19.26% and 15.4%, respectively.

At the end of the first quarter, assets under management were at Rs 10,140 crore, up 44.6% from a year ago. During the first three months of this financial year, Asrivad Micro Finance disbursed loans worth Rs 1,814 crore, up 65% from last year.

The company's asset quality has seen some moderation during the April-June period. Gross non-performing assets constituted 2.89% of loans as of June 30, compared with 2.81% as of March 31. Similarly, the net NPA ratio worsened 14 basis points quarter-on-quarter to 1.29%. Collection efficiency stood at 100.92% compared to 101.2% sequentially.

At last count, Asirvad Micro Finance had a 1,738 branch network and an active borrower base of nearly 35 lakh.