Sebi Clears Manappuram Finance Subsidiary Asirvad Microfinance's IPO Plan

Assirvad Micro Finance, a subsidiary of Manappuram Finance, has received Sebi's approval for an IPO. The IPO will consist solely of fresh equity shares worth up to Rs 1,500 crore. The company may also issue additional shares worth Rs 300 crore via a private placement. The IPO proceeds will be used to bolster the company's capital base for future growth. Assirvad Micro Finance offers microfinance, loans against gold, and MSME loans through a vast network of 1,684 branches. It caters to over 3.25 million active microfinance borrowers. JM Financial, Kotak Mahindra Capital, Nomura, and SBI Capital Markets are the book-running lead managers for the IPO.

Asirvad Micro Finance, a subsidiary of listed NBFC Manappuram Finance, has received Sebi's nod to raise funds through an initial public offer, an update with the markets regulator showed on Tuesday.

The proposed initial public offering is only a fresh issue of equity shares of up to Rs 1,500 crore with no offer for sale (OFS) component, according to the Draft Red Herring Prospectus (DRHP).

The company may consider issuing fresh shares on a private placement basis worth Rs 300 crore.

The company, which filed preliminary IPO papers with Sebi in October 2023, obtained observations from Sebi on April 22.

Earlier, the markets regulator put Asirvad Microfinance's IPO on hold in January this year. Sebi's observation means the regulator's approval to float the public issue.

As per draft papers, proceeds from the fresh issue were proposed to be used to augment the capital base of the company to meet future business requirements.

Asirvad Micro Finance was launched in 2008 with just two branches in Tamil Nadu. Over the years, it has expanded its presence across 22 states and 4 Union Territories through a network of 1,684 branches, as of March 31, 2023, which covers 450 districts As of March 31, 2023, it caters to 3.25 million active borrowers in the microfinance portfolio that constitutes a majority of its assets under management. It also caters to loans against gold and provides MSME loans.

JM Financial Ltd, Kotak Mahindra Capital Company, Nomura Financial Advisory and Securities (India), and SBI Capital Markets are the book-running lead managers and Link Intime India Pvt Ltd is the registrar of the offer. The equity shares are proposed to be listed on the BSE and NSE.

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