Excellent Wires and Packaging Limited IPO And Its GMP...
18 Apr, 2025
Belstar Microfinance Limited IPO
Belstar Microfinance Limited IPO: A Comprehensive Overview
Belstar Microfinance Limited, a prominent Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI) and a subsidiary of Muthoot Finance, has filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO) amounting to â¹1,300 crore. This blog delves into the intricate details of the IPO, the company's financial health, strengths, risks, and the current status of the offering.
Company Profile and Operations
Belstar Microfinance is the ninth-largest Non-Banking Finance Company-Micro Finance Institution (NBFC-MFI) in India based on Assets Under Management (AUM) as of December 31, 2023. The company primarily operates through the Self-Help Group (SHG) lending model, which constitutes 57% of its total loan portfolio. Its operations span 19 states and union territories, serving approximately 2.67 million customers. It that offers small-ticket loans to people in rural and semi-urban regions, mostly women, to assist family necessities, education, crises, and income-generating activities. The company's microfinance services are intended to empower women and advance financial inclusion.
Founded in 1988, Belstar Microfinance Limited was purchased by Dr. Kalpanaa Sankar, one of the promoters and managing director, in 2008. It is a member of the Muthoot Finance Group. By the end of 2023, listed corporate promoter Muthoot Finance Limited owned 66.13% of the business.
Its services include lending Small business loans (SELs), festival loans, education loans, consumer goods loans (CGLs), micro enterprise loans (MELs), and emergency loans are among the loan products that Belstar Microfinance Limited provides.
WHAT IS GMP?
GMP (Grey Market Premium) is the difference between the IPO price and the grey market price. It is the premium amount paid for the traded IPO shares. It plays an important role in IPOs as it reflects how the IPO would react on the listing day.
A grey market is a place where shares/stocks are traded before being listed officially on the stock exchange.
Belstar Microfinance Limited IPO
| GMP Date | IPO Price | GMP | Last Updated |
|---|---|---|---|
| - | - | - | - |
**The GMP prices displayed here are solely for informational purposes related to the grey market news. India IPO does not engage in or facilitate grey market trading, nor are these rates (sub2) indicative of any trading activity. We also do not recommend or endorse participation in the grey market.**
Belstar Microfinance Limited IPO Details
| Detail | Description |
|---|---|
| IPO Date | to |
| Listing Date | - |
| Face Value | ₹10 per share |
| Issue Price Band | - |
| Lot Size | - |
| Total Issue Size | [.] shares (aggregating up to ₹1,300.00 Cr) |
| Fresh Issue | [.] shares (aggregating up to ₹1,000.00 Cr) |
| Offer for Sale | [.] shares of ₹10 (aggregating up to ₹300.00 Cr) |
| Offer for Sale | Bookbuilding IPO |
| Listing At | BSE, NSE |
| Share Holding Pre Issue | 5,48,44,055 shares |
Belstar Microfinance Limited IPO Timeline
| Detail | Description |
|---|---|
| - | - |
Belstar Microfinance Limited IPO Lot Size
| Application | Lots | Shares | Amount |
|---|---|---|---|
| - | - | - | - |
Belstar Microfinance Limited IPO Reservation
| Investor Category | Shares Offered |
|---|---|
| QIB Shares Offered | Not less than 75% of the Net Offer |
| Retail Shares Offered | Not more than 10% of the Net Offer |
| NII (HNI) Shares Offered | Not more than 15% of the Net Offer |
Belstar Microfinance Limited IPO Promoter Holding
| Share Holding Pre Issue | Share Holding Post Issue |
|---|---|
| 73.30% | - |
Competitive Strength:
- -
Belstar Microfinance Limited IPO Financial Information
| Period Ended | Assets | Revenue | Profit After Tax | Net Worth | Total Borrowing | |||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 31 Dec 2023 | 8,096.88 | 1,295.21 | 235.12 | 1,323.69 | 6,424.18 | |||||||||||||||||||||||||||||||||||
| 31 Mar 2023 | 6,226.9 | 1,037.92 | 130.33 | 1,092.3 | 4,826.49 | |||||||||||||||||||||||||||||||||||
| 31 Mar 2022 | 4,560.29 | 728.43 | 45.13 | 855.93 | 3,557.04 | |||||||||||||||||||||||||||||||||||
| 31 Mar 2021 | 3,467.29 | 552.94 | 46.65 | 541.72 | 2,795.64 | |||||||||||||||||||||||||||||||||||
| Amount in ₹ Crore | ||||||||||||||||||||||||||||||||||||||||
Key Performance Indicator
| KPI | Values |
|---|---|
| RoNW | 11.93% |
| Pre IPO | Post IPO | |
|---|---|---|
| EPS (Rs) | 23.76 | |
| P/E (x) |
Objectives of the Belstar Microfinance IPO
The Belstar Microfinance IPO isn’t just about listing on the stock exchange: it has a focused game plan. Here's what the company aims to achieve with the funds raised:
1. Fueling Future Growth (Onward Lending)
The biggest chunk of the IPO proceeds will go towards onward lending.
In simple terms, Belstar wants to use the money to give more loans to more people. This helps the company expand its loan book and reach more underserved communities, especially in rural and semi-urban areas.
2. Strengthening the Balance Sheet
A public listing improves a company’s financial profile. It reduces dependence on debt and brings in long-term capital. For Belstar, this means more financial flexibility and better creditworthiness in the future.
3. General Corporate Purposes
Part of the IPO money will go toward day-to-day operations, business development, technology upgrades, hiring, and other administrative expenses. Think of this as working capital to keep things running smoothly while the company grows.
4. Provide Exit to Existing Shareholders (via Offer for Sale)
The IPO also includes an Offer for Sale (OFS) portion. This allows some of the existing investors — like private equity firms and institutional backers — to partially exit and book profits.
It’s a way for early believers in the company to cash out after helping it grow.
5. Increase Brand Visibility and Market Presence
Going public brings visibility. A listed company has more public trust, better media coverage, and more credibility with lenders and partners. This can help Belstar attract new customers and expand into new regions faster.
Conclusion
Belstar Microfinance's proposed IPO presents an opportunity to invest in a company with a strong operational footprint and backing from Muthoot Finance. However, potential investors should be cognizant of the risks associated with the unsecured loan portfolio, regional concentration, and current sectoral challenges. The deferred timeline for the IPO also suggests a cautious approach, awaiting more favorable market conditions.
RHP:
DRHP:
Frequently asked Questions (FAQs )
-
1. What is the Belstar Microfinance IPO?
The Belstar Microfinance IPO is the company's proposed Initial Public Offering through which it plans to raise capital from the public. It includes a fresh issue of shares and an Offer for Sale (OFS) by existing investors.
-
2. Why is Belstar Microfinance going public?
The IPO will help Belstar raise funds for onward lending, support general business operations, and give existing shareholders a chance to partially exit. It’s also a strategic step to boost visibility and credibility in the financial sector.
-
3. Who owns Belstar Microfinance?
Belstar is a subsidiary of Muthoot Finance, one of India’s most trusted financial services brands. Muthoot currently holds a majority stake in the company.
-
4. What does Belstar Microfinance do?
Belstar provides microloans, mostly to underserved women and small entrepreneurs in rural and semi-urban areas. It uses the Self-Help Group (SHG) lending model to reach communities that traditional banks often overlook.
-
5. How is the IPO structured?
The IPO consists of two parts: • Fresh Issue of ₹1,000 crore (new shares to raise funds) • Offer for Sale (OFS) worth ₹300 crore by existing investors looking to sell part of their stake
-
6. What will the IPO funds be used for?
Most of the funds will go toward onward lending, meaning more microloans to borrowers. The rest will be used for general corporate expenses and to strengthen the company’s financial position.
-
7. Is the IPO date confirmed?
Not yet. Though Belstar received approval from SEBI, the company has decided to delay the launch due to market uncertainties and stress in the microfinance sector. A revised date will likely be announced in the coming months.
-
8. What are the risks of investing in Belstar Microfinance?
Like most microfinance firms, Belstar’s portfolio is mostly unsecured, and a large part is concentrated in a single region (Tamil Nadu). Any regional or economic disruptions could impact repayments and performance.
-
9. How can I apply for the IPO?
Once the IPO opens, you can apply via your demat account through platforms like Zerodha, Groww, Upstox, or through your bank's ASBA (Application Supported by Blocked Amount) facility.
-
10. Is this IPO suitable for retail investors?
If you're a retail investor who believes in long-term growth stories rooted in financial inclusion, this IPO may interest you. But it's important to consider the risks and consult with a financial advisor before investing.
