Muthoot Finance Limited

Market leading position in the Gold Loan business in India with pan-India reach and branch network

- MFL’s experience, through their Promoters, has enabled them to have a leading position in the Gold Loans with AUM of Rs. 61,875.32 crore.

- Due to its early entry, they have built a recognizable brand in the rural and semi-urban markets of India.

- The average disbursed Gold Loan amount outstanding was Rs 75,940 per loan account as of March 31, 2023 while interest rates on the Gold Loans usually range between 12.00% and 24.00% per annum.

Strong brand name, track record, management expertise and Promoter support

- MFL’s operating history has evolved over a period of 84 years with skills and goodwill acquired by the Promoters over these years cannot be easily replicated by competitors

- Its highly experienced and motivated management team capitalizes on this heritage at both the corporate and operational levels

- Under the current management team, the loan assets portfolio has grown from Rs 3,369.01 crore as of March 31, 2009 to Rs 63,209.76 crore as of March 31, 2023

Strong capital raising ability to fund a high profitability business model

- MFL has a track record of successfully raising capital from various sources at competitive coststhrough regular issuance of secured redeemable non-convertible debentures to retail investors, earlier on a private placement basis and now through public issue route as a means to access capital for its Gold Loan business

- MFL believes that it is able to raise capital from retail investors because of its leadership, goodwill, trust, reputation, track record, performance, stability in the business and strong quality asset portfolio

Geographical concentration in operations and low market presence in non-gold businesses

- Operations have a high degree of geographical concentration - South India accounted for nearly 50% of the company’s AUM and 60% of its branches as on June 30, 2023

- Significant regional concentration renders the company to vulnerabilities of economic, social, and political disruptions in the region

Performance of non-gold segments to remain monitorable

- Sizeable share of gold loans would support overall portfolio quality – MFL’s standalone portfolio almost entirely consists of gold loans and it has diversified its exposure via its subsidiaries

- The consolidated portfolio is currently concentrated towards gold loans, comprising 87.3% of the loan book meanwhile, Microfinance, affordable housing and vehicle finance accounted for 8.2%, 2.2% and 0.5% of the loan book, respectively, as on December 31, 2022

- The performance of the non-gold segments was impacted by the pandemic-related disruptions because of the unsecured nature of the microfinance business and the average credit profile of the borrowers in the housing and vehicle finance segments