MUMBAI: Muthoot FinCorp is in advanced talks with foreign private equity funds to raise Rs 400-500 crore for its microfinance business as it looks to expand its diversified lending portfolio with more consumer-centric products and insulate itself from the impact of volatile gold prices.
“Yes, we are looking to raise funds and are in serious talks with some large foreign PE funds. I cannot divulge any names at this moment. This is part of our strategy to de-risk assets by diversifying into non-gold credit businesses,” Muthoot FinCorp chairman Thomas John Muthoot told ET. Muthoot FinCorp is the flagship of the Muthoot Pappachan Group.
The fundraising in the micro finance business is expected to conclude in a couple of months and the funds will be used for business expansion. The transaction will help the company more than double its asset book from Rs. 2,100 crore to Rs 5,000 crore in two to three years. “We are diversifying as a full-fledged financial services firm, and will be completing the portfolio diversification in its full measure and then plan an IPO,” he said. The financial services verticals (gold loan, low value housing loans, two-wheeler loans, microfinance, MSME) of the Muthoot Pappachan Group, put together, aims to grow its loan disbursement by 35-40% this financial year. Last year, it had disbursed Rs.18,000 crore.
Originally Posted on: