Asirvad Micro Finance, a subsidiary of Manappuram Finance, announced its plans to raise ₹1500 crore through an Initial Public Offering (IPO).

What Happened: As per the Draft Red Herring Prospectus (DRHP) submitted to the Securities and Exchange Board of India (SEBI), Asirvad Micro Finance, a microfinance institution primarily serving economically disadvantaged women, has filed for an IPO.

There is no offer-for-sale component, and the face value of the IPO is ₹10 per share. The allocation will be divided, with at least 75% for qualified institutional buyers, not more than 15% for non-institutional bidders, and not more than 10% for retail individual bidders.

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Simultaneously, the company is also considering a private placement for cash consideration aggregating up to ₹300 crore. If this placement happens, the fresh issue size will be reduced. The net proceeds from the fresh issue aim to support the company’s capital base to meet future business requirements and are planned to be deployed in FY24.

In Fiscal Year 2022-23, Asirvad Micro Finance reported total assets under management (AUM) amounting to ₹10,040.89 crore, a significant increase from Rs 7,002.18 crore in Fiscal Year 2021-22. The company’s net profits for the year ended March 2023 stood at ₹218.13 crore in FY22-23, rising exponentially from the ₹15.26 crore booked in FY 21-22.

Asirvad Micro Finance, which began operations in 2008 with just two branches in Tamil Nadu, has since expanded to 22 states and 4 UTs via a network of 1684 branches, covering 450 districts. It caters to 3.25 million active borrowers in the microfinance portfolio, making it India’s largest NBFC MFI in terms of geographic spread and third in terms of assets under management and client numbers.

The book-running lead managers for the offering are JM Financial Limited, Kotak Mahindra Capital Company Limited, Nomura Financial Advisory and Securities (India) Private Limited, and SBI Capital Markets Limited. The equity shares are proposed to be listed on the BSE and NSE.

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