Muthoot Microfin case: Sebi exempts six family trusts from open offer obligation

Capital markets regulator Sebi on Monday exempted six Muthoot family trusts from making an open offer for the proposed indirect acquisition of shares in Muthoot Microfin as part of an internal restructuring.

Six promoter family trusts -- Thomas John Muthoot (MF) Trust, Thomas George Muthoot (MF) Trust, Thomas Muthoot (MF) Trust, Preethi John Muthoot (MF) Trust, Nina George Muthoot (MF) Trust and Remmy Thomas (MF) Trust have been exempted from open offer obligations under the Takeover Rules.

According to the order, the restructuring will be implemented through multiple transfers of shares to the six trusts, including after the conversion of compulsorily convertible preference shares (CCPS) and transfers by the spouses of the promoters.


Upon completion of the transaction, the trusts will collectively hold a 63.35 per cent stake and control in Muthoot Fincorp Ltd (MFL), which in turn holds a 50.21 per cent shareholding in Muthoot Microfin Ltd (MML).

The proposed transaction would have otherwise triggered an open offer requirement under the takeover regulations.

Sebi noted that it had granted an exemption for an earlier restructuring proposal on May 5, 2026.

However, Muthoot Fincorp's board approved its proposed initial public offering (IPO) on May 16 this year, requiring changes to the transaction structure to comply with the minimum promoters' contribution (MPC) norms under the Issue of Capital and Disclosure Requirements regulations.

The proposed conversion of CCPS also altered the structure, prompting the trusts to file a fresh exemption application.

Thomas John Muthoot, Thomas George Muthoot, and Thomas Muthoot will retain the remaining 28.23 per cent stake in Muthoot Fincorp to meet the MPC requirement for the IPO.

The regulator observed that the restructuring is part of an internal family reorganisation for succession planning and would not result in any change in the control or management of Muthoot Microfin or prejudice public shareholders.

"I... grant exemption to the proposed acquirers, viz., Thomas John Muthoot (MF) Trust, Thomas George Muthoot (MF) Trust, Thomas Muthoot (MF) Trust, Preethi John Muthoot (MF) Trust, Nina George (MF) Trust and Remmy Thomas (MF) Trust, from complying with the requirements of... of the SAST Regulations, 2011 with respect to the proposed indirect acquisition in the target company, viz., Muthoot Microfin Ltd, by way of proposed transactions," Sebi said in the order.

Sebi said the exemption is subject to conditions, including the filing of a report within 21 days from the date of acquisition.

The regulator also clarified that the exemption is limited to open offer requirements and does not waive other compliance obligations under applicable regulations.

The exemption from open offer obligations is valid for one year from the date of the order, within which the proposed acquirers must complete the acquisition; failing which, it will lapse and cease to exist, it added.