Muthoot Microfin has secured an additional USD 10 million (about Rs 81.6 crore) in private equity investment from Greater Pacific Capital.
This is the second round of capital infusion by Greater Pacific after it had pumped in USD 50 million in the first round in December 2021, the microfinance arm of the Thiruvanathapuram-based Muthoot Pappachan Group said in a statement on Monday. With this round, the fund’s stake in the microfinance firm has increased to 16.6 per cent, it added.
Prior to this round, Creation Investments, the Chicago-based PE firm held 9.8 per cent in the company and Greater Pacific held 14.4 per cent, the rest being held by the Kerala-based Muthoot Fincorp and the Muthoot Pappachan Group family members. The new investment will help Muthoot Microfin to maintain its growth momentum, expand operations and further extend its services to rural households. During FY22, its AUM grew 25 per cent and profit surged six folds. In the first two quarters of the current financial year, its asset under management has grown by 20 per cent, however, the company did not disclose how much that was.
Muthoot Microfin is the fourth largest MFI in the country with an asset under management of Rs 7,300 crore and 1,000 branches across 18 states, serving 2.3 million women entrepreneurs. The company has a healthy asset base with bad loans being just 0.16 per cent. Thomas John Muthoot, the chairman of the Muthoot Pappachan Group said with the additional USD 10 million equity investment by Greater Pacific, the capital adequacy of the company will be 28 per cent, which would help it meet immediate growth requirements.
The Mumbai- and London-based Greater Pacific Capital is a leading private equity investor, focused on delivering development impact alongside financial returns, with measurable impacts on the UN’s sustainable development goals.
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