Muthoot Microfin Shares Open At 6% Less Than IPO Price On BSE

Muthoot Microfin has recently made a big step by offering its shares to the public, known as an IPO (Initial Public Offering). Muthoot Microfin is a well-known company, part of the Muthoot Pachappan Group. 

The company has decided to sell their shares from December 18 to 20. In an IPO, companies sell their shares to raise money and allow the public to own a part of the company. 

Muthoot Microfin planned to raise money by selling new shares and also allowed existing owners to sell some of their shares, which is known as an Offer for Sale (OFS).

The response to their IPO was quite strong. Many people wanted to buy the shares, about 11.52 times more than what was available. Especially big investors and institutions showed a lot of interest.

Now, when the company started selling shares in the stock market, which happened today, the price was a bit lower than expected. 

The shares were supposed to be sold at ₹291 each, but they started at ₹278 on Bombay Stock Exchange (BSE) and ₹275.30 on National Stock Exchange (NSE). This means the shares were sold for less than what people thought they would be.

It seems that the market values this company. Before the shares were sold in the market, there was an expectation (in the grey market, which is an informal market) that the shares would do better than the actual price. But on the first day of trading, the shares didn’t reach that expected value.

Despite this, Muthoot Microfin is a strong player in the microfinance sector. They are one of the top companies in this field in India, especially in Kerala and Tamil Nadu. They have a large number of customers and branches across many states in India.

Muthoot Microfin’s business model focuses on providing small loans to people who don’t have easy access to traditional banking services, mainly in rural and semi-urban areas. They primarily help women entrepreneurs to start or expand their small businesses. These loans are usually of small amounts but are significant for the borrowers. 

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Muthoot Microfin earns money by charging interest on these loans. Their model is based on the idea of supporting community development and financial inclusion, helping people with limited resources to grow their businesses and improve their living standards.