Muthoot to divest upto 6 per cent with private placement to raise Rs500 crore

The third largest gold loan financier Muthoot Fincorp, a part of the Muthoot Pappachan Group, yesterday said it was looking at divesting up to 6 per cent of its promoter holding to raise around Rs500 crore.

"As part of our aggressive expansion plan, wherein we will be adding nearly 1,000 more outlets by the end of the fiscal, we are looking at a private placement of 5-6 per cent of the promoters' stake in Muthoot Fincorp, which would get us around Rs 500 crore," Muthoot Fincorp chairman and managing director Thomas John Muthoot told PTI in Mumbai in an interaction.

He said the company had been growing its business at a very healthy rate with an average operating margin of 4-5 per cent.

With India growing at 6-7 per cent and considering the customer profile the company was focused  on, the current economic slowdown would have no impact on the company's business, he said. He was offering his comments on whether it is the right time for the company to expand.

The company also is also planning an IPO in the next 18-24 months. He said the company had not decided yet on the extent of the dilution after market serntiments improved.

He added the funds infusion would take the group closer to an eventual public issue, though he did not offer a time frame for going public. The promoters currently hold the entire stake in the non-deposit taking NBFC.