Business
A part of Muthoot Pappachan Group, the company provides micro loans to women with a focus on rural areas. It is present in 339 districts across 18 states of India. Of the total loan book of Rs 10,867 crore as of September 2023, a half belonged to three states including Tamil Nadu, Kerala, and Karnataka. The proportion of these states has fallen from 67% in FY21 as the company focuses on expanding in the north region which now contributes 23% to the loan book compared with 15% in FY21. The company had 31.9 lakh active customers as of September 2023 of which 15 lakh have been using its online application reflecting a significant technology adoption.
Financials
The gross loan portfolio doubled to Rs 10,867 crore between FY21 and FY23. Revenue from operations grew by 44.5% annually to Rs 1,428.8 crore while net profit shot up to Rs 163.9 crore from Rs 7.1 crore during the period. Net interest margin (NIM) expanded by 340 basis points to 11.6% in the three years to FY23. The return on assets (RoA) improved to 2.2% in FY23 from 0.2% in FY21. For the six months to September 2023, revenue was Rs 1,042.3 crore while net profit at Rs 205.2 crore exceeded the FY23 profit. NIM was 12.4% while GNPA was 2.4% in the six months to September, down from 3% as of March 2023.
Valuation
Considering the total equity after the IPO, the company demands a price-book (P/B) multiple of upto 1.9. Peers including CreditAccess and Spandana Sphoorty trade at a P/B of 4.8 and 2.2 respectively.