Muthoot Microfin Ltd - Stock Valuation and Financial Performance

Muthoot Microfin was incorporated as ‘Panchratna Stock and Investment Consultancy Services Private Limited’ on April 6, 1992 at Mumbai, Maharashtra, India as a private limited company under the Companies Act, 1956. Thereafter, the company was converted into a public limited company pursuant to a special resolution passed by its Shareholders on April 30, 1994 and consequently, the name of the Company was changed to ‘Panchratna Stock and Investment Consultancy Services Limited’. A fresh certificate of change of name, consequent upon conversion to a public limited company was issued by the RoC on June 9, 1994. Thereafter, the name of the Company was changed to ‘Panchratna Securities Limited’, in order to align with the object clause and activity being carried on by the Company, pursuant to a resolution passed by the Shareholders on June 11, 1994. A fresh certificate of incorporation, consequent to the change of name was granted to the Company by the RoC on June 22, 1994. The RBI granted a certificate of registration dated March 18, 1998 to the Company, under its erstwhile name ‘Panchratna Securities Limited’ for registration as an NBFC under Section 45-IA of the Reserve Bank of India Act, 1934.

Subsequently, the name of the Company was changed to ‘Muthoot Microfin Limited’, in order to reflect the group’s identity of the shareholders i.e., the Muthoot Pappachan Group and the operations of the Company, pursuant to a resolution passed by the Shareholders on October 29, 2012. A fresh certificate of incorporation, consequent to the change of name was granted to the Company by the RoC on November 6, 2012. Pursuant to a change in the objects clause of the Company, which was approved by way of special resolution dated January 21, 2013, the Company was granted a certificate of registration of the special resolution confirming alteration of object clause dated February 12, 2013. Subsequently, the RBI granted a revised certificate of registration dated March 18, 1998, reflecting the change of the Company’s name to Muthoot Microfin Limited, with effect from March 25, 2015. The RBI has granted NBFC-MFI status to the Company with effect from March 25, 2015, pursuant to an endorsement on its certificate of registration dated March 18, 1998.

The company is a microfinance institution providing micro-loans to women customers (primarily for income generation purposes) with a focus on rural regions of India. It is the fifth largest NBFC-MFI in India in terms of gross loan portfolio as of March 31, 2023. It also the third largest amongst NBFC-MFIs in South India in terms of gross loan portfolio, the largest in Kerala in terms of MFI market share, and a key player in Tamil Nadu with an almost 16% market share, as of March 31, 2023. The company has built its branch network with an emphasis on under-served rural markets with growth potential, in order to ensure ease of access to customers. Its branches are connected to its IT networks and are primarily located in commercial spaces which are easily accessible by its customers.

The company is a part of the Muthoot Pappachan Group, a business conglomerate with presence across financial services, automotive, hospitality, real estate, information technology infrastructure, precious metals and alternate energy sectors. The Muthoot Pappachan Group has a history of many years in the financial services business. It is the second largest company under the Muthoot Pappachan Group, in terms of AUM for the Financial Year 2023. MFL, the flagship company of the Muthoot Pappachan Group, holds 59.29% of the pre-Offer Equity Share capital in the company, on a fully diluted basis.The company’s relationship with the Muthoot Pappachan Group provides it with brand recall and significant marketing and operational benefits. Further, there are significant synergies between the financial services business of the group and its micro-finance business.

The company’s wide range of lending products is aimed at catering to the life-cycle needs of rural households. It primarily provides loans for income generating purposes to women customers living in rural areas. Its loan products comprise (i) group loans for livelihood solutions such as income generating loans, Pragathi loans (which are interim loans made to existing customers for working capital and income generating activities), individual loans and Suvidha loans (which are digital loans accessible through the Mahila Mitra application and made to existing customers to enable quick access to funds); (ii) life betterment solutions including mobile phones loans, solar lighting product loans and household appliances product loans; (iii) health and hygiene loans such as sanitation improvement loans; and (iv) secured loans in the form of gold loans and its Muthoot Small & Growing Business (MSGB) loans.

Business area of the company

The company is primarily engaged in providing financial assistance through micro loans to women engaged in small income generating activities. 

Financial products of the company 

• Livelihood solutions
• Life betterment solutions
• Health and hygiene loans
• Secured loans
• Partner institution portfolio

Awards and accreditations

• 2018: Award for implementing outstanding initiatives in the category ‘Microfinance Plus Activities’, at the MFIN Microfinance Awards 2018: In Pursuit of Excellence. 
• 2018: Comprehensive Microfinance Grading of ‘M1C1’, assigned by CRISIL.
• 2018: Awarded as a ‘Trusted Micro-Finance Brand’ at the India Best Brand Series and Awards, 2018.
• 2018: Awarded Golden Peacock Business Excellence Award.
• 2018: Best NBFC Award at the Chamber of Indian Micro Small and Medium Enterprises - MSME Banking Excellence Awards.
• 2018: Awarded ‘Finance Company of the Year – India’ at the Asian Banking & Finance Retail Banking Awards, 2018.
• 2018: Awarded for HR strategy at Asia’s Best Employer Brand Awards (9th Edition) hosted by the World HRD Congress.
• 2018: Certified as a ‘Great Place to Work’ by the Great Place to Work Institute, India.
• 2018: Winner in the category of ‘Risk management initiatives’ at the 4th Eastern India Microfinance Summit, 2018 organised by the Association of Micro Finance Institutions, West Bengal.
• 2019: ‘North India Best Employer Brand Award 2019’ organized by the Employer Branding Institute.
• 2019: Award for Brand Excellence in the BFSI Sector presented by ABP News.
• 2019: Awarded ‘Golden Peacock Award for Excellence in Corporate Governance – 2019’ (Special Commendation) by Institute of Directors, India.
• 2019: Top Organisations with Innovative HR Practices Award presented by the Asia Pacific HRM Congress.
• 2019: Certified as one of the ‘Best Workplaces in Microfinance, India’ by the Great Place to Work Institute, India.
• 2019: Awarded Asia’s Most Promising Brand in the NBFC-MFI category by World Consulting and Research Corporation.
• 2019: Awarded the Kerala Best Employer Brand Award by the Employer Branding Institute, India.
• 2021: Recognised amongst the Best Workplaces in the BFSI Industry in India by the Great Place to Work Institute.
• 2021: Indian Achievers’ Award for Emerging Company presented by the Indian Achievers’ Forum.
• 2021: Awarded ‘Best Use of Technology Award’ for Financial Services by the National Enterprises Tech Connect.
• 2021: Awarded a Certificate of Excellence for water and sanitation lending by Water.org India and Sa-Dhan.
• 2021: Certified as a ‘Great Place to Work’ by the Great Place to Work Institute, India for the period between February, 2021 to January, 2022.
• 2021: Awarded the ‘Best Digital Transformation Initiative - Micro Finance’ in the NBFC Category by the BFSI Excellence Awards, 2021.
• 2021: Recognition of the Company’s ‘Commitment to being a Great Place to Work’ by the Great Place to Work Institute, India.
• 2022: Awarded for the Mobility category at the Technology Senate Awards South, 2022.
• 2022: Awarded the ‘Best Digital Transformation Initiative - Financial Services’ at the India Devops Show 2022 organised by Quantic.
• 2022: Awarded the ‘Best Employee-Driven CX’ by the India Customer Excellence Summit and Awards, 2022.
• 2023: Certified as a ‘Great Place to Work’ by the Great Place to Work Institute, India with validity for the period between January, 2023 to January, 2024.
• 2023: Awarded Best Learning Strategy - Gold Award by the Indian Business Council at the Human Resources Ideas & Voice Events, 2023.
• 2023: Winner in the category of ‘Modern and Agile Data Architecture and Infrastructure’ at the Economics Times Datacon Awards, 2023.
• 2023: Awarded Trailblazer in Digital Lending Award at the 2nd Elets NBFC100 Leader of Excellence Awards, 2023.

History and milestones 

• 1992: Incorporated as Panchratna Stock and Investment Consultancy Services Private Limited.
• 1994: Converted to a public limited company and name changed to Panchratna Securities Limited.
• 1998: Company obtained a certificate of registration as an NBFC from RBI.
• 2011: Company was acquired by promoters of ‘Muthoot Pappachan Group’, namely, Janamma Thomas, Thomas John Muthoot, Thomas George Muthoot, Thomas Muthoot, Preethi John Muthoot, Nina George and Remmy Thomas.
• 2015: RBI granted NBFC-MFI status with effect from March 25, 2015.
• 2016: Raised Rs 50 crore from Creation.
• 2017: Crossed 1 million clients.
• 2017: Raised Rs 15 crore in the first round of investment for the year from Creation.
• 2017: Raised Rs 35 crore in the second round of investment for the year from Creation.
• 2018: Raised Rs 30 crore in the first round of investment for the year from Creation.
• 2018: Raised Rs 25 crore in the second round of investment for the year from Creation.
• 2019: CRISIL upgraded the rating to A Stable for bank facilities and debt instruments.
• 2021: Launched the Mahila Mitra app.
• 2021: AUM crossed Rs 5000 crore.
• 2021: Raised Rs 187.72 crore from GPC.
• 2022: Raised Rs 185.66 crore in the first round of investment for the year from GPC.
• 2022: Raised Rs 81.81 crore in the second round of investment for the year from GPC.
• 2022: CRISIL upgraded the rating to A+ Stable for long-term bank facilities and debt programmes.
• 2022: Crossed 2 million active customers.
• 2022: Crossed 1,000 branches.
• 2023: Reached 10,000 employees.
• 2023: AUM crossed Rs 10000 crore.
• 2023: Launched Digital first Suvidha Loan.