Subscribe to Muthoot Finance IPO: GEPL Capital

MUMBAI: GEPL Capital has advised investors to ‘Subscribe’ to initial public offering of Muthoot Finance with a medium to long term perspective.

“MFL is a market leader in its segment. It has had an average RONW of 39% which is far better than its competitor (19.61% for Manappuram). The company has
major global PE firms invested in it; namely Matrix Partners India Investments LLC, Baring India Private Equity Fund III Limited and The Wellcome Trust Limited.

At the upper and lower ends of IPO price band of Rs160-Rs.175, MFL is available at a P/E of 11.72x and 12.82x respectively as compared to 22.73x for Manappuram.

Considering robust GDP growth of India, increasing purchasing power and ever-growing appetite for gold, the company looks well poised for a sound growth
trajectory in the years to come.

Hence, we recommend SUBSCRIBE with a medium to long term perspective,” the report said.

Muthoot Finance has entered the primary market to raise between Rs 824 crores to Rs 901 crores by issuing shares in the price-band of Rs 160-175 per share.

ICICI Securities and Kotak Mahindra Capital are the book running lead managers to the issue.