Gold financing company Muthoot Finance Ltd on Friday said that it has acquired an additional stake of 2.05 percent in its subsidiary Belstar Microfinance Ltd in a cash deal of Rs 43 crore.
Following the acquisition, the gold loan provider’s total shareholding in the Tamil Nadu-based microfinance company has increased to 59.02 percent from 56.97 percent earlier, the company stated in an exchange filing.
The equity stake is purchased from promoters through off-market transactions, Muthoot Finance added.
Belstar Microfinance Ltd is a subsidiary of Muthoot Finance Ltd. Some of the directors of Muthoot Finance are directors on the board of Belstar Microfinance.
The microfinance company had a turnover of Rs 1,031.26 crore in 2022-23 as against Rs 727.22 crore in 2021-22 and Rs 551.40 crore in 2020-21.
Muthoot Finance in 2017 had acquired a 53 percent stake in Belstar as part of its diversification strategy. Subsequently, it has increased its stake in the microfinance lender.
Belstar Microfinance is reportedly looking to come out with an IPO at a valuation of Rs 3,000-4,000 crore. The company is a leading MFI in Tamil Nadu. It had a loan book of Rs 6,227 crore in 2022-23.
Muthoot Finance last month had announced additional equity infusion of Rs 400 crore in another wholly-owned subsidiary Muthoot Money Ltd.
Additional equity infusion was aimed at strengthening the capital base and improving the capital adequacy ratio of the company.
Muthoot Finance last month reported a 21.6 percent year-on-year growth in standalone net profit to Rs 975.1 crore in Q1 of FY24 against Rs 802 crore in the year-ago quarter.
The net interest income (NII) of the lender jumped 23.8 percent year-on-year to Rs 1,934.9 crore against Rs 1,562.3 crore in the same period previous fiscal.
Muthoot Finance shares were trading 0.14 percent lower at Rs 1,258.90 apiece on BSE at 12.02 PM.
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